10 Things that Expedite Your Personal Loan Application

While availing a Personal Loan has become easier in the present times, the utility of the same lies in a simple fact- how quickly the amount gets disbursed in your bank account. Lenders across the marketplace have revolutionized their loan approval processes and concentrated their efforts on minimising the rate at which the loan application moves from one point to another.

Though the movement of your loan application verily depends on the credit policy of the lender, there are a few vital points that can expedite your loan application status and ensure quicker processing of a loan. Yes, you may get a Personal Loan disbursed within a few working hours! Let’s run down a must checklist for quick personal loan approval from your preferred lender.

1. Maintain a good credit score:

This is one of the prerequisites for getting Personal Loan approval. Lenders use your credit score to assess your creditworthiness and your repayment ability. You must, therefore, have a credit score of 750+ at the time of submitting your application. This will not only help you get quick approval but also allow you to avail attractive personal loan interest rates. As CIBIL is the industry benchmark for credit rating, you must maintain a CIBIL score of 750 or more before applying for a Personal Loan.

2. Ensure that you have a healthy credit profile:

In addition to having a good credit rating, you must have a robust credit profile. This will help the lenders assess your credit behaviour and if you are responsible enough to repay the EMIs on time.

Some of the important aspects of your credit profile that are assessed by lenders are:

• Credit Utilisation Ratio
• Repayment History
• Settlement of outstanding dues
• Defaults, foreclosures or write-offs
• Total outstanding loans
• History of the credit lines and several others

3. Stable balance in your bank account:

Your bank account is an important determinant in your Personal Loan application being approved in a quick time. You must maintain a healthy balance in your bank account at all times, which should be much higher than the minimum amount of requirements. Moreover, make sure that there are no instances of cheque bounce or EMI bounce in the last six months. It is advisable that rather than maintaining multiple bank accounts with a low balance, you maintain only one or two bank accounts with a substantial amount.

4. Keep all the documents updated:

While the Personal Loan process requires only minimal documents, but still, some documents are required. If you wish to get quick approval of the loan, you must have all the documents ready and updated with you. Documents like KYC and bank account statements are readily available and can be updated in a quick time. Certain documents take some time to be updated, so make sure you have them updated till the most recent date (as applicable).

Keep the following documents handy:

• Income Tax Returns for the last 2 years
• Audited financials for the last 2 years (self-employed or businessmen)
• Salary slips for the last 3 months
• Form 16 for the last 2 years
• Form 26 AS for the previous 2 years
• Loan repayment track record for running loan accounts
• NOC for recently closed loans

5. Identify suitable lenders:

Personal Loans for government employees, as well as salaried individuals, are readily available across the lending universe.

However, not many lenders offer personal loans for self-employed individuals and instead offer unsecured business loans. So, you must thus first identify the lenders who are willing to provide a Personal Loan to your profile. Moreover, looking for suitable lenders can help you save some money also, as several lenders offer concessional Personal Loan interest rates to their targeted customers.

6. The loan amount and debt-to-income ratio:

To get quick approval for your personal loan requirements, you must pay attention to these two aspects. Always apply for an amount which you can afford and is according to your repayment capacity and does not push your debt-to-income ratio beyond 50%. Moreover, maintain a debt-to-income ratio of less than 30% at the time of submitting your application. By ensuring compliance on these two fronts, you can speed up the approval of your loan application.

7. Stable work profile:

Whether you are a salaried individual or are self-employed, lenders will approve your Personal Loan quickly if you have a stable work profile. When you are running the same business or are working in the same organisation for the last many years, it reflects responsible behaviour on your part. Lenders consider that diligent loan payers are more likely to be more responsible in making the repayment on time. Moreover, a stable work profile ensures a steady flow of income, reducing the chances of default.

8. Provide complete details in one go:

Make sure that you provide complete documentation to the lender along with the Personal Loan application. This will reduce the processing time significantly. Repeated delays due to lack of documents is one of the biggest reasons behind delays in approval of Personal Loan applications. So, always ensure you have all the documents ready and provide them to the lender in the very first instance.

9. Meet the eligibility criteria:

This goes without saying that you must apply with only those lenders whose eligibility criteria you can satisfy. Otherwise, the application is just going to be rejected or delayed.

10. Exercise restraint:

Be a responsible borrower and do not avail loans unnecessarily. You must maintain some time gap between different loan applications. Simultaneously applying with multiple lenders will not only reduce your credit score but will also cost you a significant sum of money on account of processing fee. But worst of all, it would reflect you as a desperate borrower, leading to the lender scrutinizing your application more minutely, causing delays.

These are the most important things you need to know for getting quick approval for your Personal Loan requirement. So keep them in mind and plan your application accordingly.