15 Hidden Tips to Speed Up Your Personal Loan Process

1. Check Your Credit Score Before Applying 

The lending body will always consider your credit score while reviewing your loan application. If your credit behaviour is not clean, it will lower your score. For example, default in EMI payment or missing your credit card bill payment can bring your credit score down. Banks often reject the loan applications of individuals with a low credit score, and NDFCs charge a higher interest rate on your Personal Loan in such cases. therefore, it is advised you keep your credit score higher than 750. If it is weak, try cleaning it by paying off your existing debts to increase your credit score.

2. Maintain a Stable Income and Employment History

An applicant’s steady income is a determinant in your loan approval as lenders know that there is a regular income flow that can pay your loan off. This helps in speeding up your application. It exhibits the trust of the lender that the applicant would be in a financial position to pay your loan. If you have recently changed your job or you have a history of multiple job changes in a short period of time, we recommend you wait till your salary becomes consistent to be able to apply for the Personal loan

3. Reduce Existing Debts

Your Debt-to-Income Ratio should be low, which signifies the difference between your gross income and the amount spent on paying your existing loans. Make sure to keep your Debt-to-income ratio less than 43% so that the lender develops trust in your ability to repay the loan. If this ratio is high, try to reduce it by clearing off your existing debts before you consider applying for a new loan. 

4. Choose the Right Lender

It is recommended you do thorough research on finding the right lender for your financial debts. Choose a lender which gives you a flexible loan option with a low interest rate. It is important to match your loan expectations with your lending body so you get the best deal with minimal surprises. This can make your application process smoother and you stand a better chance to get a Personal Loan according to your requirements. 

5. Apply for the Right Loan Amount 

Always decide on a realistic loan amount that matches your income and caters to your requirements. If you quote a higher amount than your financial portfolio, the lender can question your creditworthiness and may not approve the amount. It is therefore prudent to stick to the exact amount that would fit your monetary budget, can be easily repaid and serves your financial purpose. It will also expedite your loan process.

6. Ensure All Documentation is Accurate and Complete

This is one of the most common factors in delaying your loan application. Make sure your documentation is on point with all the relevant papers like your income proof, Income Tax return, Form 16, PAN card, Aadhar Card, Bank statement etc. stated by the lender. Make sure all the statements are latest in nature. Also, it is advised that all these papers should be reviewed before submitting and clarifying any doubt from the officials. 

7. Demonstrate a Strong Repayment Plan

Winning the trust of your lender is one of the pivotal steps in getting your loan approved in no time. You should be able to chart out a clear repayment plan. You can suggest the EMI amount and highlight any other financial commitment beforehand to make the lender confident of your finances and its judicious management. 

8. Avoid Multiple Loan Applications Simultaneously 

Make sure you don’t approach a lot of lenders and apply for a loan by sending multiple loan applications. This can result in undue suspicion of your behaviour and your credit score can also be negatively impacted. This is because multiple applications might come across as an unstable financial portfolio or even desperation to borrow money. Therefore try to stick to one lender after doing your homework. 

9. Opt for a Pre-Approved Loan Offer 

These days you will find a lot of financial lenders offering their customers with pre-approved loan facility. If you are a bank account holder and your bank wants to give you this loan based you your credit score and relationship with the bank, you should go for it. The loan process is faster and your application is approved quickly as the lender has confidence in your financial history. We recommend you go through the terms of your loan before proceeding with the loan.

10. Build a Good Relationship with Your Bank

Maintaining a good rapport with your financial lender goes a long way in getting your loan approved swiftly. It is advised you keep good terms with your bank by communicating with them regularly, paying your bank bills on time and maintaining a decent account balance. This can help in obtaining any type of loan from your bank with a quick turnaround time.

11. Consider Applying with a Co-Applicant or Guarantor

There is a possibility that the applicant has a low credit score and loan approval seems a little tough. This can be resolved if you apply with a co-applicant who has a good credit score and proof of regular income. This helps in building a degree of confidence in the financial institution. You can also produce a guarantor with a robust financial history which can speed up your loan approval process.

12. Be Transparent About Your Financial Situation 

While applying for a Personal loan, one should be honest about their finances so that there is no iota of doubt present in the mind of your lender. Whatever your financial obligations are, you should clearly explain it to the lender so that there is no expectation mismatch. Remember, your honesty can work in your favour and make the lender confident about your creditworthiness, making you eligible for a loan.

13. Use an Online Loan Calculator

Make use of the online calculator to get an idea of your monthly repayments and the interest rate. These calculators give you a comprehensive analysis of how interest and EMI vary with the loan amount. Make sure your loan amount is aligned with your requirements and is easy to pay in EMIs so that your application gets approved quickly. 

14. Stay Updated with Your Loan Status 

Once you have applied for your loan, keep on checking its application status by checking with the lending body. There is typically an official or customer care centre executive who will let you know about the status of your application. If there is any discrepancy in your application, that can be quickly addressed if you keep in touch.

15. Leverage Your Assets as Collateral

Consider the option of producing collateral by going for a secured loan in case there is some hiccup in the approval process. The collateral can be in the form of your property, investment or even jewellery. This builds the trust of the lender, and this in turn hasten your approvals. 

Remember, being thorough and proactive throughout the process can make all the difference. Use these tips to navigate the loan application process smoothly and secure the funds you need when you need them.