Here’s How You Can Increase Your Personal Loan Eligibility in a Pandemic

Personal loans hold the key to achieving certain life goals, and during the pandemic, have helped people tide over many eventualities. These types of loans are unsecured, meaning that the bank or lender does not ask for collateral against which the loan amount is given. This makes personal loans risky investments for the lender. For this reason, they assess the applicant’s eligibility after thoroughly examining their credit score, ability to pay EMI, job profile, and income.

While the applicant can do little to make favorable changes in their employment situation, they can ensure a healthy credit score and make smart decisions to increase their EMI affordability. The interest rate on personal loans ranges from 12% to 24%. That figure applies to a certain borrower depending on their credit history and ability to repay the loan. Here are some ways in which applicants can improve their personal loan eligibility –


How much EMI can you afford to pay?

After analyzing your monthly salary, the lender will check to see if the total EMI liability stands at less than 50% of the salary. Your application may not be approved if your loan repayment EMI is more than 50% of your paycheck. The tenor for loan repayment dictates the amount of EMI payable. The shorter the tenor, the higher the EMI amount; the longer the tenor, the smaller the EMI payable. It would help if you remembered that when the tenor is short, your interest is lower, and a longer tenor means higher interest payable.

Check your credit score.

The ideal credit score for personal loan eligibility is between 750 and 900. Having such a credit score can assure you of getting a personal loan. However, should your credit score dip below 750, there is a chance your application will be rejected. It reflects a poor loan repayment history, and you could be labeled as a high-risk applicant. If your application is approved, you will likely be required to pay a high-interest rate for a personal loan. Remember, you can take the right steps to improve your credit score with timely repayment of existing loan EMIs and credit card bills.

Add a co-applicant

Getting a co-applicant can be a good idea if you are ineligible for a personal loan. Adding one or multiple co-applicants can help you improve your eligibility as numerous borrowers become liable to repay the loan. It lowers the credit risk for the lender, making it easier for them to approve your application.

Avoid multiple loan inquiries

Each time you make a loan inquiry, the lender, raises a question with credit bureaus in a routine assessment of the risk of default you may pose and your overall creditworthiness. These inquiries, presented by the bank, are hard and are listed in your credit report. A few points bring down your credit score whenever such an inquiry is recorded.

This is why, when browsing for a personal loan, you should not make inquiries with multiple lenders in a short period. Instead, you should compare the various lenders and the personal loans offered by online financial marketplaces. Questions raised online are registered with the credit bureau, but they do not affect your credit score as they are considered soft inquiries.


With Finserv MARKETS, you can compare personal loans offered by some of the leading lenders in the country. So, for all those personal life goals, such as planning a wedding or taking the vacation of your dreams, get a personal loan of up to Rs. 25 Lakhs with a processing fee of up to 2.50% of the loan amount.

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