4 ways to enhance personal loan eligibility during a global crisis


The banks and NBFCs decide the eligibility of personal loans essentially based on the applicant’s income, credit score, job profile, employer’s profile, and EMI affordability. Although the loan applicant can influence very little on the income, job, and employer profile, one can definitely take some measures to enhance credit score and EMI affordability to improve his loan eligibility.

Here are some ways to enhance personal loan eligibility during the COVID crisis;

Review your credit score

Those with credit scores of 750 and above usually have higher chances of getting loan sanctioned. Hence, evaluating one’s credit score before initiating a loan application will help the applicant in taking corrective measures to develop a credit score and whereby, his loan eligibility. ” Some of these measures involve holding credit utilization ratio within 30%, managing a balanced credit mix, monitoring co-signed/guaranteed loans and timely repayment of card and credit card bills,” says Gaurav Aggarwal, Director & Head of Secured Loans of Paisabazaar.com.

Assess your EMI affordability

Usually, lenders favor total EMIs, including the new EMI for a personal loan, to be under 50% of one’s net monthly income. Those surpassing this level have lower likelihoods of loan approval. So, personal loan applicants should meticulously choose their loan tenure based on their capacity to repay EMIs. A shorter tenure would have higher EMIs and lower interest costs, whereas a longer tenure would have smaller EMI and higher interest costs.

Avoid multiple loan inquiries within a short span

Whenever an individual advances a loan application, the lender gets his credit report from the credit rating agencies to evaluate creditworthiness. Such lender-initiated credit report requests are considered as hard inquiries, each of which gets recorded in the credit report and lessens the credit score by some points. Making several loan inquiries with various lenders within a brief span can significantly diminish one’s credit score.

Rather, “loan applicants could visit online financial marketplaces to choose the most fitting lender after analyzing various promising lenders based on their loan amount and eligibility criteria like credit score, monthly income, job profile, etc. These financial marketplaces would also get credit reports while providing the multiple loan offers, their credit report inquiries are interpreted as soft inquiries and do not influence applicants’ credit scores,” says Aggarwal. from Paisabazaar.com.

Include a co-applicant

Those failing to avail a personal loan can consider adding a co-applicant or co-applicants to enhance loan eligibility. Including a co-applicant lessens the credit risk involved for the lender as the co-applicant also becomes equally liable for the timely repayment of the loan.



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