New Delhi: Taking a loan has become very complicated in recent times. One has to go to the banks for the loan, even after that there is no guarantee that the loan will be received. The loan application gets rejected even after following various procedures. However, loan applications are also rejected due to the fault of the customers. By improving which you can increase the eligibility to take the loan.
Banks or lending institutions carefully scrutinize and evaluate the loan application. This includes the individual’s credit score, monthly income, job profile and employer profile. If any one of these things does not meet the bank’s standards, then the application is canceled.
Things to keep in mind while applying for loan
Credit score is the biggest influence on loan eligibility. Lenders give priority to loans to those who have a credit score of 750 or above. Lenders are hesitant to give loans to those who have a low credit score. That is why it is important that you improve your credit score and maintain it. A good credit score is ensured by paying EMIs and credit card dues on time and timely repayment of loan amounts for which you are the guarantor.
Credit report review required
Credit bureaus calculate your credit score on the basis of credit reports of lenders and credit card issuers. Adding any wrong information to your credit report can have a negative impact on your credit score. Sometimes such information is entered in the credit report by mistake from the credit bureau or the lender. That’s why it’s important to review your credit report. Before applying for the loan, after evaluating it, if there is any mistake, then it should be rectified.
Avoid Doing Too Much Inquiry
Whenever you apply for a credit card or loan, the credit card issuer or lender requests your credit report from the credit bureaus. Such a request is considered a serious investigation. If multiple such requests are made over a short period of time, your credit score will be low. Therefore, instead of inquiring directly from the financial institutions, one should take the help of the financial market-places available online to avail the loan. You can select a loan on these marketplaces as per your credit score, job profile, income and other eligibility criteria.
The loan repayment tenure that you choose in the loan application plays a very important role in whether the loan application is accepted or rejected. The lending institution sees how much you are left with after paying off all your required monthly expenses. These expenses include pre-existing EMIs, insurance premiums and other investment contributions. It is from your savings that the lending institution estimates whether you will be able to repay the loan on time or not.
first published:Jan. 14, 2022, 1:19 p.m.