5paisa Loans Blog

Top 5 Tips to get your Personal Loan Approved faster

By Anurag Srivastva | 27 Mar 2020

A personal loan is an unsecured loan and so the lender does not have any collateral to fall back upon. Hence, the sanctioning of any personal loan; be it from a bank or from a P2P lending platform will be based on your credit score and track record. When you approach a P2P lender for a personal loan, rejection rates can be quite high. Being a neutral and impersonal P2P platform, they need to conduct due diligence before extending a loan. However, you can work towards increasing the chances of getting your personal loan approved.

Maintain a good CIBIL score

Your CIBIL score is normally on a scale of 300 to 900. A score of 700 is the bare minimum for you to qualify for loans but more than the score it is the consistency of the score that matters a lot. Your CIBIL score is a function of your overall borrowings, servicing capacity based on known sources of income and past repayment track record. If you consistently maintain a credit score of above 750, you stand a better chance of getting your personal loan approved.

Be disciplined about repayments and issuing cheques

When you apply for a personal loan on a P2P platform, the personal loan offers you get will depend on your credit score. But more important is your track record. If you have a clean record of past loan repayments it is a positive when you apply for personal loans online. Cheque bounces and ECS returns are negative markings on your track record and if the P2P platform finds too many such cases, you are liable to be rejected.

Don’t borrow money just because it is available

Most banks and P2P lending platforms are quite aggressive in marketing their loan products. But when you apply for personal loans online, make it a point to only borrow what you need and not just because it is available. The ratio of your loan servicing to net income is an important consideration in the acceptance or rejection of your personal loan application.

Avoid shooting out multiple loan applications

People are habituated to clicking on mail links and applying for loans whenever they get an offer. Each time you make a loan application it impacts your credit score. They will look at you with suspicion if you behave like a compulsive borrower. Also, every rejection will reduce your credit score.

Keep a tab on the number of personal loans

In short, don’t apply for another personal loan when the first one is still not repaid. The more the number of personal loans open, the lesser your score and greater the costs you incur.

These minor tips can go a long way in improving your chances of getting your personal approved; especially at P2P platforms.