When you’re in need of an instant loan for an urgent financial situation, getting your application approved is key. Whether you apply through a loan app or in person at a lender’s office, there are a few reasons your application may get rejected.
So, what do you do when you need funds instantly? While it is difficult to speed up the process of loan approval and disbursal, there are a few things you can do to enhance the likelihood of getting approval on the application. Here are 6 ways you can boost your chances of getting approval.
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Keeping Your Affordability in Mind
One of the initial aspects to examine when considering loans is the fees and costs tied to them. This is crucial because they directly impact your finances, requiring you to repay more than what you initially borrowed.
Lenders determine if you can afford the loan by considering the overall borrowing cost, which comprises interest and other one-time fees such as processing charges. Using an app can help you estimate these costs in advance, allowing you to assess your repayment capacity. If the final amount exceeds your financial capacity, you have a higher chance of getting rejected.
This is why it is important that you keep your debts to a minimum. This is because any other financial obligation leaves less room for new credit to fit into your budget. If you apply for a personal loan when you don’t have any unpaid credit card bills and existing loans, your chances of getting instant approval increase.
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Ask for Exactly What You Need
Another key factor to consider is your loan amount. Most lenders offer quick approval on small personal loans, compared to a substantial amount. This is why you should only borrow the amount you require and nothing more.
But how do you decide on the perfect loan amount? Analyse your needed loan amount beforehand and calculate your EMI to make an estimate. This will also help you repay the loan effortlessly, as you can avoid paying interest on any unnecessary loan amount.
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Apply with a Co-applicant or Guarantor
When providing loans, lenders spend considerable time evaluating your creditworthiness, leading to potential delays in approval. If you can provide them with confidence in your ability to repay, then you can reduce the waiting time. While having a high credit score is a good approach, having a guarantor can also assist.
It can be any of your family members with a good credit score who can co-apply with you. This way, lenders are sure that they can recover the loan amount from a second individual. It can also help you boost your eligibility as lenders consider your combined credit score in case of co-application.
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Don’t Apply with Multiple Lenders Simultaneously
If you are in need of instant funds, you may feel tempted to apply for a loan with multiple lenders or a loan app to improve the chances of approval. Avoid this as it has more negative consequences compared to the benefits.
With every loan application, financial institutions run a hard inquiry to see your credit score and history. This can have a temporary negative effect on your score. If you apply for multiple loans in a short while, your score will drop with every credit check from the lenders.
This way, you can damage your score and reduce your chances of getting approval. Thus, it’s best that you compare and apply where you have the best chance.
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Show Good Financial Standing
Your financial health matters a lot to the lender. This is why you need to assure them that you are a reliable borrower. If you don’t have sufficient income to repay the loan, lenders have a higher risk of losing money.
This is why they check your monthly income and existing debts to check how much loan you can afford. One way you can improve your chances is to show your total income from all the different sources. This includes any freelancing work, side hustles, part-time jobs, investments, rental income, etc.
In addition, you must also meet the minimum income criteria. Check how much minimum loan you can get based on your income on the loan app or by calling their customer care.
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Work on Your Credit History
As soon as you apply for a loan, the lender checks your credit score. This gives them a quick glance at your overall credibility as a borrower. If you have a low score, then you will get rejected right away. But a good score can not only boost your chances of approval but also get you a good offer.
To make sure that your score is optimum, you need to run a credit check periodically. However, most credit bureaus charge for generating credit reports. If you want to check your score without paying any fees, then you can download the lifetime-free OneScore App.
It is a smart tool that gives you complete control over your credit health to boost your loan eligibility. With its Score Planner facility, you can get smart advice on how to handle your credit and manage your debt. You simply need to set a goal to get a personalised plan. Using this, you can boost your score with discipline and get quick approval.
With unlimited free credit reports, you can check which factor is holding you back from achieving your desired score. In case any discrepancy or error in your credit report is affecting your score, you can report that directly through the OneScore app. Once you’ve reached a good score, apply directly for up to ₹5 lakhs through the OnePL. Download now!