How to improve your chances of getting a large personal loan
Banks and NBFCs carefully evaluate a number of factors before approving personal loans of a high value, and increasing your eligibility will make it simpler to avail high-value credit.
Maintain a good credit score Your credit record is the initial factor that lenders consider while deciding on your loan application. A credit record of over 750 enhances approval chances and brings down interest rates for you. Paying bills and EMIs on time, reduced usage of credit cards, and fewer loan requests are certain methods of establishing and maintaining a positive credit history.
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Keep your debt-to-income ratio low Banks are also very interested in your debt-to-income ratio, pitting monthly payments against income. If most of your salary is tied up in EMIs, banks will avoid lending more. Keeping debt obligations under 40% of your monthly salary indicates financial sensibility and assures lenders you can comfortably service another batch of repayment obligations.
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Show stable income and employment Regular employment and regular income are the most important signs of repayment ability. Lenders would like to see candidates with a regular employment history, preferably two to three years in the same job or company. Job-hopping more than once is likely to raise questions of stability. If one is self-employed, having neat financial papers, audited accounts, and tax returns helps to demonstrate regular income flow, hence strengthening your personal loan application with a high amount.
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Increase your repayment capacity Improved repayment capacity is also a way to improve eligibility. You can improve it by clearing outstanding small loans before applying for a large loan or opting for longer tenor loans, which reduces EMI amounts. The higher your disposable income, the more it is guaranteed by banks that you would be able to make additional repayments easily, and thus they would be willing to offer larger loan sizes at reduced interest rates.
Get your documentation in order Even deserving candidates risk being rejected if papers are not current. Submission of recent payslips, bank statements, income tax returns, and identification proof is a requirement for speedy processing. Self-employed persons may be requested to submit audited business accounts and GST returns. Maintaining all documents current and accurate prevents processing delays as well as enhances your chances of getting the high-value personal loan you need.
