Applying for a loan can be a very stressful experience. Selecting a lender, understanding the eligibility criteria, filling the loan application, submitting the documents and waiting for the loan approval. There are times when you’ve done all of the above mentioned, yet the loan application gets rejected. And this happens when you are in dire need of the loan amount. It is disheartening and demotivating. In such times, one wonders, what could they have done for a different outcome.
Do you know what you can do to increase the chances of your loan application getting approved?
We’ve prepared a list of a few things that can help you increase the chances of getting your loan approved.
- Apply for a small amount – When you apply for a big loan amount, there is a big risk the lender takes. With smaller amounts, the risk is smaller. The chances of approval are dependent on how risky it is for the lender
- Apply for a shorter term – like the loan amount, a longer term poses a bigger risk for the lenders and also increases the amount of time they’ll get their money in. It also increases the total repayment amount for you. If you can afford to pay, choose a smaller term
- Build and Improve your Credit Score – If you are not a first time borrower, you must be aware of your Credit score. Your Credit Score is an important factor in deciding whether your loan application gets approved or rejected. Keep an eye on your current score and build it by repaying loans on time and in full
- Do not apply for multiple loans – When you apply for multiple loans at different places, each application impacts your Credit Score
- Select the lender very carefully – Different lenders offer loans to different kinds of borrower. Some lenders have specialized in high risk customers and others in low risk customers. Apply with a lender that suits your requirements and have specialized in catering to customers like you
- Select the loan product carefully – To select the right loan product, you’d need to look at the need the loan amount is going to fulfil. For example, you should take a auto loan for buying a motor bike or a car
While these do not guarantee the loan approval, can certainly help increase the chances.
We, at Home Credit, offer loan products that suit your needs whether you are new to credit or trying to build your credit score. Be it a mobile phone, a home appliance or a personal loan, we can help you fulfil your needs.