5 Deciding Factors Lenders Consider In a Loan Application.

5 Factors To Consider To Get a Quick Loan Approval
5 Factors To Consider To Get a Quick Loan Approval

Are you heading towards the right direction in getting your loan approval? In order to ensure that you are on the right track. So, ensure that you take care of this five crucial factors to help you get a quick loan approval.

Usually, people decide to avail of personal loans because these loan services are easy and quick. The entire procedure of applying for a personal loan takes about a few minutes to complete. However, lenders consider this specific criteria, for the loan application to get loan approval at the same quick pace. Hence, this article aims to enlighten you about some significant factors to avoid loan application rejection.

 

You, as a borrower, would want to take the right step while applying for a personal loan. For that, you should have an idea of what exactly your lender is looking for. Usually, a lender’s approval depends upon your credit score & history to determine you as a responsible borrower. Along with credit scores, there are other factors that banks and other financial institutions consider. Here are five factors that you.

Credit Score Scale For Better Loan Tenure.

Nearly all lenders look at your credit score and report because of their insight into your creditworthiness and repayment capacity. If you’re new to your lone journey then you should have a better understanding of how credit score works.  A credit score is a three-digit numeric expression that talks about your credit history or a summary of your credit history. This score is usually determined by analyzing your entire credit report and speaks about debt history & repayment behavior .

A credit score above 750 is a good credit score. On the other hand, a credit score below 650 is poor, indicating an increasing risk of default. Hence, even before applying for the loan, ensure that you have monitored your credit score position. If you haven’t  checked your credit score lately, then you should use Buddy Score to monitor the same. Buddy Score provides a free detailed analysis of your credit score with practical suggestions. So, using a free, trusted online resource to get your latest credit report can help you get a quick credit score check.

Also Read: How Does Credit Score Help Get Lower Interest Rates?

Income And Employment History

Lenders would want to know that you can pay back what you have borrowed, which means they will see if you have sufficient and consistent income. The income requirements will differ from lenders to lenders, and that is primarily  based on the amount you want to borrow. Also, if you’re borrowing more money, lenders will want to see a fair income scale as a trustworthy factor to understand your repayment capacity. Individuals working for part of the year or self-employed individuals commencing their careers can face more challenges than those who work year-round for a well-established industry. This means, you will need to show a steady employment flow of income.

Gauge The Value of Your Collateral

Collateral is a factor you ensure in exchange for a lump sum amount of money from the bank. Secured loans usually involve collateral and unsecured loan services provides loans without security .

The value of your collateral will only decide how much you can borrow. The bank needs the assurance that you will be able to return the loan in a reasonable amount of time. So, collateral is an ensuring factor that can help approve your loan quickly.

Liquid Assets For Easy Loan Sanction

Lenders also analyze if you have a lump sum amount of cash in your savings. They consider this factor to ensure that you are able transfer the cash into the money and use it for your down payment. This also reassures the lenders about the fact that even if you face sudden financial hindrance like losing a job, you would still be trustworthy customer to repay your loans without cutting down any installments.

Easy Loan Sanction

Loan Term & Its Effect

Some changes are for the better, but if they’re for the worse, they will impact your ability to repay your loan. Lenders usually feel more comfortable lending you money for a shorter period because you are more likely to pay back the loan in the near future.

A shorter loan term will also help you to save more money because you might have to pay interest for fewer years. But you’ll have a higher monthly payment, which eventually brings the decision in your hands about which kind of term you think  is right for you.

Hence, note these factors that the lender considers while evaluating your loan applications to increase your chances of getting a loan. Now that you have a fair idea about what were the factors missing in your loan application, you can take constructive steps to implement new changes. However, when you have planned to avail personal loan there are higher possibilities that you are surrounded with multiple options. But when it comes to availing instant personal loans, Buddy Loan is the most trusted third party loan aggregator in India. Buddy Loan provides you with a quick instant loan under the most trustworthy lenders in the country. There are certain criterias that Buddy Loan considers in your Loan application

The next section aims at discussing just what are the factors that Buddy Loan considers in your loan application to provide you a quick loan.

Also Read: Check Out The Strategies to Follow Before Investing in a Long-Term Personal Loan.

Crucial Factors that Buddy Loan Considers In Your Loan Application

Buddy Loan being one of the most trusted third party loan aggregators in India provides collateral free financial services. When you apply for a loan with Buddy Loan there is no need to pledge on the asset to get an instant personal loan. However , here are some of the factors that Buddy Loan considers to be very necessary in your loan application.

  • Online Personal Loan

The major factor to get a personal loan with Buddy Loan is that you have to follow an online procedure. Buddy Loan has a feature integrated to help ease online application process.
The applicant has to repay the loan through EMIs over the tenure from 6 months to 5 years. As an applicant the lender considers you to go through a paper-free process to avail personal loan.

  • Collateral Free Personal Loan

As an applicant you can avail a loan with no necessity or need for the applicant to submit any surety for applying for an instant loan. As you should have an applicant have a better record of credit score, that increases the chances of getting a personal loan at a lower interest are high. The process is very fast and requires minimal documentation.

  • Safety Of Your Loan

By law, the applicant’s information is confidential and safe with Buddy Loan from any other party apart from the lender. Buddy Loan aggregator has instantly disbursed many personal loans to applicants who hold good credit history.

  • Quick Disbursal of your Loan

The minimum and maximum loan amount you can opt for when applying for a personal loan online are between Rs.10000 to Rs. 15 lakhs.

  • Eligibility Criteria

For salaried and self-employed individuals, you need to fulfill the following criteria for  online loan process:

  1. Applicants should be citizens of India.
  2. You should be between 18 to 60 years.
  3. Applicants should have a minimum of two years of employment with your present organization for salary purposes.
  4. You should have a credit score of at least 750.
  5. Your monthly income should be a minimum of Rs.15,000.
  6. A self-employed, you should have a minimum of two to three years in the profession/business you have now.

Also Read: Get Personal in minutes with Buddy Loan App

Summing Up

With the correct estimated loan term and knowing the main factors affecting your credit score, you can now estimate the loan type, amount and affordable interest for your loan journey. However, now, Buddy Loan app aggregates the individual’s loan request to its lending partners. Make the most of your current credit score if it scales anywhere between average and good.