In the last two years, the pandemic has thrown lots of difficulties in everyone’s life. From job loss to illness, problems have cropped up one after another. And in such scenarios, taking a personal loan has become a lot more common due to income disruptions. And it is the ease of accessing that has led to many people applying and getting it during financial downfalls and monetary shortages.
But given that lenders too have become cautious in giving unsecured personal loans during covid and are assessing the SBI personal loan documents more closely, these are some tips to help you boost the approval chances.
Add a co-applicant
Your application for a personal loan may be denied if you have insufficient income, a low credit score, a higher than average EMI to income ratio, incorrect or inadequate sbi personal loan documents, or if you fail to meet any of the other qualifying conditions established by the lender. If you add a co-applicant who has an excellent credit profile, including a stable income, a high credit score, and sufficient repayment capacity, you can improve your overall loan eligibility and receive a higher amount of funding.
Your chances of having your SBI Xpress credit loan request approved are improved when you include a co-applicant in the process. This is because the inclusion of a co-applicant minimises the amount of credit risk that the lender is exposed to. If you need a larger loan amount, having a co-applicant on your application can even assist you in getting approved for it. However, keep in mind that any delay in loan repayment or default in repayment will have a negative influence on the credit ratings of both the primary applicants and that of the co-applicant.
Check the status of your credit score.
When determining whether or not to grant you credit, one of the first considerations that lenders make, even before going for other checks like sbi personal loan documents, is your credit score. Those who have a high credit score of 750 or over often have higher chances of getting a loan approved, whilst those who have a low credit score are more likely to have their application for a loan either rejected or to be charged interest rates that are substantially higher.
Checking your credit score before submitting your application for a loan will help you avoid having your loan request turned down. If you have a low credit score, you should work to improve it before applying for a sbi Xpress credit loan because it will affect your interest rate. Getting into the habit of keeping your credit utilisation ratio below 30 percent, maintaining a credit mix that is balanced, monitoring co-signed or guaranteed loans, making timely payments on loan EMIs and credit card bills, and other similar behaviours will help you achieve this goal. Consumers who are just starting out with credit can begin to establish a positive credit history by using credit cards responsibly and making sure to pay off their balances on time and in full.
Now, one more doubt one may have when reviewing their credit score is that one can get a personal loan despite having less credit score.
Well, the answer is not a simple yes or no. It depends from lender to lender and your credit profile too.
Lenders will assess various parameters of your profile like existing number of EMIs, income, age, sbi personal loan documents, etc., besides checking if you are above their minimum credit score cut-off mark. If you are, then you may get the personal loan, even if at higher rates vis a vis someone having a high credit score.
Moreover, in case you fail to get the personal loan, you can try other credit options like a gold loan, loan against property, loan against securities, top up housing loan etc.
Evaluate whether or not you can afford the EMIs
Before you apply for a sbi Xpress credit loan, you should determine whether or not you will be able to afford the EMIs by deducting from your monthly income the amount of your obligatory monthly expenses, such as insurance premiums, existing EMIs, rent, and contributions to SIPs, among other things. When considering your application for a personal loan, the majority of financial institutions prefer that your total EMIs, which include your new EMI for the personal loan, not exceed fifty percent of your gross monthly income. After determining how much you are able to spend on your monthly EMI payments, you should choose the shortest possible loan term to bring down the total amount you will spend on interest.
However, when doing so, be sure that your efforts to contribute towards significant financial goals are not jeopardised in the aim of paying higher EMIs, as this may have a negative impact on your plans for the future in terms of your finances. If you decide to go with a longer loan term, you should make an effort to prepay whenever you have extra money available; however, you should check to be sure that your overall interest savings will be significant after taking into account any prepayment fees that may be applicable.
Avoid submission of numerous direct loan queries.
When you apply for a sbi Xpress credit loan directly with a lender, the lender will obtain a copy of your credit report from a credit bureau in order to determine whether or not you are creditworthy. These kinds of credit report queries conducted by lenders are known as “hard enquiries,” and each one will result in a few points being deducted from your credit score. Therefore, conducting loan inquiries with a number of different lenders, particularly in a short period of time, can dramatically lower your credit score. Also, remember that even if you have all the required sbi personal loan documents and have enough repayment capacity to repay the expected EMIs, you can have your application rejected if you had applied desperately with a lot of lenders back to back, which harmed your credit score and hence weakened your credit profile.