Instant Personal Loans are extremely beneficial in financial shortfalls and emergencies. You can obtain them at competitive interest rates, without collateral, with minimum documentation, and repay in flexible loan terms selected according to your budget. Considering the amazing loan plans with 100% digital procedures, getting an Instant Personal Loan approval feels like child’s play. But when you apply for one, several eligibility requirements, formalities, and other terms and conditions delay the loan processing.
Since many seek Personal Loans during urgent financial needs, here are a few steps to reduce possible delays.
Build Your Credit Before Applying
A decent credit score always works in your favour when you apply for credit. It improves your loan eligibility, helping you secure the best loan offers from top lenders at the lowest interest rates. However, you cannot build your credit overnight. It needs consistent repayment history and responsible credit behaviour throughout.
So, check your credit score to see where you stand and take these steps to build your credit score:
- Never miss credit card bills and loan EMI payments.
- Reduce your financial obligations to bring your DTI ratio down.
- Avoid maxing out your credit cards to control the credit utilisation ratio.
- Give diversity to your credit profile with different types of credit accounts.
- Retain old accounts to prolong your credit age.
A good credit score will attract the best loan plan at reasonable interest rates easily and quickly. Use an interest rate calculator to see what interest rate you can obtain with your current credit score and compare it with other lenders before finalising.
Fix Your DTI Ratio
Apart from your credit rating, the DTI ratio is another crucial parameter lenders check when evaluating your Personal Loan application. It is the percentage of your net monthly earnings to the total financial obligations you pay each month. For instance, if you earn ₹ 1 Lakh per month and make payments worth ₹ 50,000, your DTI ratio is 50%. It is a high DTI ratio that is unfavourable for loan applications. So, before applying for a new loan, reduce this number to 30% for quick approval.
Review Your Credit Report to Fix Any Errors
Despite sincere efforts, your credit score may stay low due to errors in your credit report. That is why reviewing the credit report at regular intervals is advisable. Credit bureaus generate your credit report based on your credit-related activities. If the lender misreports them or the credit bureau fails to update them in your report, your credit score will stay low due to no fault of yours.
Therefore, before applying for a Personal Loan, get your credit report’s latest copy and review it carefully to identify any errors. If you spot any, report them to the credit bureau and request a correction. You will get an instant boost in your score once they fix the errors.
Choose a Reputed Employer
Finding a job with a reputed employer is tricky. However, lending institutions prefer applicants working with trusted and reliable companies. When you have a stable job with an established organisation, you have a high chance of getting loan approval quickly without any tangles. Your employer’s reputation largely affects your job stability, income regularity, growth potential, and repayment capacity. Lenders also look at your work experience with the employer. So, being employed at a reputable organisation improves your chances of approval without unnecessary formalities and delays.
Opt for a Longer Repayment Tenure
Opting for a longer tenure makes repayment easier by reducing the monthly EMIs. So, even with a modest income and substantial financial obligations, lenders feel confident you can repay your loan on time. Use an EMI calculator to calculate EMIs for various loan terms and opt for one with the EMI amount you can easily afford. A smaller tenure will increase the EMI amount, making it challenging for you to repay the EMIs on time. Therefore, opt for a longer repayment tenure to get quick approval and assurance of repayment.
Bonus Tip: You can initially opt for a longer term and make pre-payments when possible. Doing that will help you stay ahead of your repayment schedule with minimal chances of default.
Have All Documentation Ready
Lack of necessary documents is one of the most common reasons for delayed Personal Loan approvals. Although lending institutions have minimal documentation requirements for instant Personal Loans, you must submit valid identity, address, and income proofs with the application form. If some of them are missing or have errors, they may delay the loan process unnecessarily. Therefore, before applying for a Personal Loan, know the lender’s requirements and prepare the necessary documents to ensure quick approval.
Try to Get a Pre-Approved Personal Loan
A pre-approved Personal Loan is the best way to get your application sanctioned quickly. Lending institutions provide these loan offers based on your credit rating, DTI ratio, repayment capacity, and other parameters. They decide on an appropriate loan amount at a specific interest rate and provide you with an offer. If the offer comes at the right time, you can grab the opportunity to cover your expenses. Since the lender is already aware of your repayment habits, has your documents in their records, and the loan amount and interest rate calculator are already decided, getting a pre-approved loan is pretty quick.
Apply from an NBFC With Whom You Already Have a Good Relationship
Applying for a Personal Loan from a lender already familiar with your financial position and credit-related habits. Opting for a lending institution that knows your history helps you move faster in the loan process. However, before applying for a new loan, resolve any current issues like outstanding balances, disputed charges, etc. This way, you can build a good relationship with the loan company, build trust, and get faster loan approvals without hassle.
Although obtaining instant Personal Loans is easy these days, thanks to the 100% digital loan procedures many modern NBFCs support, following these tips will attract approval quickly. Since Personal Loans are urgent requirements in most cases, these steps will help you get the required funding when you need it the most.