When faced with an emergency or a financial crunch, instant personal loans can be beneficial. They require minimal documentation and no collateral. A personal loan approval feels like a child’s play with many banks and NBFCs promoting instant personal loans aggressively. Nevertheless, there can be many eligibility requirements, terms, and conditions that financial institutions do not disclose up front, resulting in delayed processing of a loan. In order to cut out all possible delays when applying for an instant personal loan, these tips should be followed:
Online personal loan applications are the fastest and most secure way to apply for a loan. Upon submitting your application with all the required information and uploading your documents, you will receive a confirmation message from the lender. The lender will review your profile and documents and approve or reject your loan application. Additionally, you receive all updates on your loan application via email and/or message. After you have submitted all the required documents, the loan approval process typically takes one week. Processing of the disbursement may take 1-2 days.
Make Sure Your Credit Score Remains High
Your credit score represents your creditworthiness. A credit score above 700 is generally considered good, but a credit score above 750 can be an added advantage for a personal loan approval. Therefore, a good credit score is necessary to qualify for a personal loan. Lenders use this criteria to evaluate your profile, especially in a personal loan, since it is an unsecured loan without collateral.
Furthermore, loan approval is based on your income and credit history. Good credit scores are considered low-risk profiles by lenders, meaning you are less likely to default on your loan repayments in the future. Not only will this increase your chances of being approved quickly, but it will also help you get a lower interest rate and no processing fees.
Manage Your Bank Account Well
Lenders check your average monthly balance while assessing your repayment capacity. A bank calculates your Average Monthly Balance by adding the daily closing balances of all days in a month and dividing them by the number of days in the month. The bank/NBFC will lend to you if you maintain a good balance since it shows you are able to repay the loan.
Moreover, banks offer seamless and hassle-free instant personal loans, pre-approved personal loans, and pre-qualified personal loans if you maintain a higher average savings balance. With just a few clicks, such personal loans can be credited into your savings account. To make an informed decision, read the terms and conditions of the instant loan, know the various charges, and compare them with those offered by other lenders before applying for the loan.
Don’t Apply With More Than One Lender
People who are in urgent need of money usually apply for personal loans with multiple banks and NBFCs in order to increase their chances of getting a loan as soon as possible. You might give lenders the impression that you are in a financial crunch and desperate to obtain a personal loan by applying to numerous lenders. It is possible for the lenders to deny you a credit facility under such circumstances. Furthermore, multiple loan applications may result in multiple rejections, which can negatively affect your credit score.
Keep All The Documents Ready
Ensure you have all the necessary documents before applying for a personal loan. Generally, lenders do not ask for many documents for an unsecured loan. For a list of required documents, check the lender’s website or ask a bank representative. Having all the documents handy will speed up loan processing.
Provide Accurate Information
By providing accurate personal and income details, you will increase the chances of loan approval and simplify the entire process. Providing the lender with all your income sources at once will prevent the lender from asking for additional income-related documents if your primary source of income is insufficient to repay the loan. In addition, if you are staying on rent, you need to provide your rental agreement and proof of permanent address.
Get What You Can Afford
Your loan application will be rejected if you apply for a higher credit limit than you can repay. A personal loan does not require you to provide any security, so you should only consider your income sources and apply for an amount you can easily repay. Consider all your fixed and variable expenses, the possibility of increased expenses, and your current debt when evaluating your credit repayment capacity.
An instant personal loan might not be as easy as it seems, but if you follow all the above tips, you’ll be able to get one approved quickly. In most cases, an instant personal loan is an urgent requirement, but you should not apply for one in a hurry. Do your research and apply to the lender whose eligibility and requirements best match yours. To avoid unpleasant surprises, read all the terms and conditions and charges in advance, such as processing fees, pre-payment charges, and foreclosure charges. Furthermore, a personal loan app like Fibe makes loan processing easy and fast.