Tips To Get Your Personal Loan Approved From Your Bank

When you need money to make ends meet, you probably consider taking out a personal loan. A personal loan is usually an unsecured loan where you don’t put up any collateral like your car or house and yet the lender grants you the loan on the basis of your credit score and repayment ability. Since the lender doesn’t have any guarantee for the loan apart from your own reputation, you are charged high interest rates than what you would be charged if you took out a secured loan.

Here are some tips and advices to getting your personal loan approved

  • Determine the type of loan you need: When people speak of personal loans, they usually refer to the unsecured installment loans. The lending requirements are different for different kinds of loans. If you don’t have a good credit score, you won’t be granted an unsecured loan and the lender might ask you to take out a secured loan instead. Hence, you have to first determine the type of loan that you need to take out.
  • Analyze your credit score: Don’t just apply for those loans which you know you won’t qualify for. Every time you apply for new loans, this will be reported on  your credit report and the hard inquiries will have a harsh impact on your credit score. So, keep track on your credit report and credit score to know what kind of reaction you might expect from the lenders.
  • Opt for credit repair: If you’re into the market to take out personal loans, you would definitely be aware of the importance of your score. In case you don’t have a good score, you should opt for credit repair. Either go for DIY credit repair or through credit repair agencies. Once you enhance your score, you can get a loan within your affordability.
  • Check your DTI ratio: Apart from the credit score, one more number that is checked by the lender is your DTI ratio which is the ratio between your monthly income and monthly debt obligations. A high DTI ratio will mean more debts in accordance with your income and will automatically mark you as a risky borrower with higher chances of defaulting. Therefore, take steps to reduce your DTI ratio so as to grab better rates.

Follow the personal loan advice mentioned above in order to get a loan within your means and take the needed steps to pay back on time.

Know more about personal loan here.

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