Why is Personal Loan becoming Famous in India

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Some of the reasons why personal loan is becoming famous in India are given below:

Amidst high inflation, a segment of the extensive Indian middle class has curtailed expenditure on non-essentials over the past year, while concurrently opting for credit to purchase consumer products. This trend has contributed to India’s consumption resilience, even amidst global economic slowdown post-pandemic. Unsecured loans, which necessitate no collateral, serve as a significant driver of this consumption surge.

The banking regulator has cautioned lenders to monitor unsecured loans closely, encompassing consumer goods loans, personal loans, and credit cards. While current official data doesn’t raise significant concerns, certain lending indicators merit attention.

Despite financial constraints, Indians are increasingly inclined towards travel, driven by millennials, young professionals, and the burgeoning middle class. Additionally, consumers are keen on upgrading consumer durables and are open to EMI options if product prices are beyond immediate affordability.

How to Improve your Chances of Getting a Personal Loan?

Credit Clean-up: One of the main factors taken into consideration by lenders is your credit score. Getting a personal loan is easier with a high credit score. If your score is low, you must check your reports to see if there are any errors. Sometimes, simple errors could have an adverse effect on your scores, and if you find any of these, you must report them to CIBIL.
Rebalancing your Income and Debts: Lenders ask for proof of income when you apply for personal loans in order to ascertain your debt-to-income ratio. Consider the sale of liquid assets like stocks or earning more through a part-time job to increase your annual income. Doing so will increase your debt-to-income ratio and increase your chances of getting a loan.
Consider Co-Signers/Guarantors: If you are finding it hard to get a personal loan on your own accord, you can apply for one by adding a co-signer or guarantor. The person you choose as a guarantor must have a good credit score. Their main aim is to guarantee that you will repay the loan. However, they will also be liable to repay the loan themselves if you are unable to do so. Picking an individual with a credit score over 750 will considerably increase your chances of getting a personal loan.
Limit Your Borrowing: It can be risky to ask for more money than you require to meet your financial targets. Make sure that you calculate how much you need and apply only for that specific amount.
Choose the Right Lender: Every lender has their own requirements when it comes to credit scores and income. When looking for personal loans, pick a lender whose eligibility criteria you meet and apply accordingly. The problem with applying with multiple lenders is that each of them will check your credit score, and each time your full credit report is pulled out, your credit score drops, albeit marginally.

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How to Avoid Rejection of Personal Loan Applications?

The approval of a personal loan application depends on many factors. When you apply for a loan, you should make sure that you are fulfilling all the factors to ensure the approval of your loan application. The eligibility criteria for personal loans may vary from lender to lender. However, there are some common criteria which include the age of the applicant, his or her income, credit score, the status of employment, and so on. Before you apply for a loan, make sure that all the eligibility criteria are being fulfilled. This will help you avoid the rejection of your loan application. Although there are other options that you can resort to in case your loan application gets rejected, it is recommended to double-check before applying to avoid the chances of rejection of loan application.

How to Check Personal Loan Status?

There are two main modes of checking the status of your loan application. Most lenders offer both online and offline modes through which you can keep tracking your personal loan status.

Online Mode:

Most lenders offer the option of logging in to their official portal to help you track the status of your loan application. You can use the application number or reference number which is issued by the lender for this purpose. On the other hand, if you have applied for a loan through a third-party aggregator website such as BankBazaar, you can just log in to its web portal and track the status of your loan application directly.

Offline Mode:

If you are not comfortable using the online platform, you can also track the status of your personal loan application through offline means. You can visit the branch office of your loan provider and check the status of your loan application. On the other hand, you can also connect with your lender over the telephone through their helpline or customer care number.

For both these methods, you would be required to provide a few basic details such as your name and the application number or reference number. Head to BankBazaar to know more about how to track your personal loan status.