Over the past few months, covid-19 not only claimed the lives of countless people but also ruined economies around the world; forcing countless others to the brink of poverty. So people around the globe, currently facing various forms of financial threats, from paying existing debts to buying even the most basic needs of life.
So in such times, for those who do not have the form of savings, choosing a personal loan is probably the most practical solution. After all, these loans are not only non-collateral (that is, do not require any collateral) but also have extremely affordable interest rates. Now I know what most of you are thinking: “How can he ask us to borrow more money?” or even along the lines of “Is he the one who will pay the interest?” But believe me when I say, “At this point, small personal loans are the best way for you to get out of this difficult situation.”
So now if you’ve decided and want to borrow some capital, I’m here to help you get that cash as quickly as possible. However, in order for that loan to be approved, we need to work on the criteria for your loan eligibility. So there’s no need for further advertising, here are five best ways to improve eligibility for your personal loan:
Borrow only what you need
This is like the first golden rule when applying for a personal loan. After all, financial institutions take huge risks by accepting a non-mortgage loan. So when you search for more than you need, you’re just increasing that risk weight and reducing your chances of approving a loan.
You can also improve the eligibility of your personal loan by presenting the reasons for financial assistance and the total amount of the loan. By doing this, you create a sense of trust with your lender; because you only tend to borrow the necessary amount, which you can easily repay.
Work on that credit score
Asking you to work based on your credit score before applying for a mortgage loan must be an intellectually one person at this time. After all, it is your credit score that will be scrutinized by financial institutions, and decide the fate of your application. Therefore, the higher your credit score, the more chances you have of getting approved.
While improving credit scores takes a lot of time and effort, it’s extremely easy and you can easily do so by following these 3 simple tips:
Get a copy of your credit report at least once a year and check if there are any possible differences. Often, inaccurate information, such as wrong credit lines, closed accounts, etc. will affect your credit score the most.
What’s more, you can also increase your overall credit score by paying your bills and EMI (equivalent to monthly installments) on time.
Also, make sure that you avoid opening a new credit account uncomely. Because, new credit accounts often lead to the ability to spend more, thereby causing you to swing money and accumulate more debt.
Maybe, consider a co-signer
Your personal loan conditions depend directly on your ability to repay. Therefore, it only makes sense for you to increase your credit and income with the help of a co-signer.
You ask the co-signer what is? The co-signer is the person who agrees to be equally responsible for repaying the loan amount that you need to borrow. So fair to just that person has good credit scores and sources of income.
However, make sure that you notify the person of the risks involved before they agree to become a co-signer.
Find the right lender
The saying, “if something seems too good to come true, then most likely it’s true” is something that everyone must remember when looking for the right lender.
After all, there are hundreds of lenders who, if not thousands, provide financial support to anyone and everyone with good credit scores to support them. However, the interest, processing fees, and other fees that you in person along with your principal amount are different between the lenders. Moreover, there are many loans waiting on payroll, specially designed to create dents on your wallet and help you make money even during the day! Therefore, always keep an eye out and carefully consider the smallest details is a must when finding the right lender.
In addition, the eligibility criteria for receiving personal loans vary among other financial institutions. So the right lender for you is probably the one who gives you the option of the loan amount with the lowest possible interest rate.
Never apply for a personal loan
Signing up for multiple loans in the hope that at least one of them will be approved is completely naïve. Because, in doing so, you make the lender believes that you need more loans to take care of your expenses; therefore, force them to question your ability to repay in the first place.
Moreover, causing further insult to injury, with each individual loan application denied, your credit score will continue to drop deeply!