Introduction

Personal loans are a common financial instrument in the modern era to cover the expenses incurred all of a sudden, consolidate debt, or finance one’s personal needs such as education or adventure. Nevertheless, getting approval for a personal loan is not straightforward all the time. To know more click on good at money lender toa payoh. This article provides a general overview of certain tips to improve the chances of approving a personal loan.

Certain Tips for quick approval of   personal loans from money lenders

Determine and Enhance Your Credit Score

It is important to note that the borrower must have a good credit score to avail of the loan. A good credit report (usually above 700) means that you are a responsible borrower who pays the debts back timely. Even licensed money lenders who are less stringent compared to banks, use credit scores in assessing risks.

Reduce Existing Debt

Lenders use the debt-to-income (DTI) ratio to find out how much of your monthly income is spent in clearing your existing loans. It is to be noted that a high DTI ratio indicates that an individual will spend the income on repaying the existing debts. Reduce your existing debt by clearing credit card balances or clearing small outstanding loans before taking a new loan.

Ensure a good income history and job stability

A steady income and working history indicate financial responsibility. When possible, it is better to stay in a job for at least 6 to 12 months before applying for a loan. Self-employed applicants should maintain thorough financial documents and demonstrate stable income over periods.

Borrow within means

Do not ask for a loan amount that is more than what you need and can pay back. Ascertaining for a significant loan with insufficient revenue and paying capability might not be considered. The EMIs (Equated Monthly Instalments) should not burden your monthly budget to the lenders’ liking.

Choose the Right Lender

Eligibility criteria differ from one lender to another. If you were denied by a bank to lend you money, a licensed money lender may be more accommodating. Choose a lender whose regulations match up with your financial status. This makes your chances of getting approval higher. Along with that, the borrower must submit the correct documentation for loan approval like income proof, identity card, bank statements etc. to avoid any delay.

Conclusion

Several factors are considered by financial institutions as well as money lenders before approving personal loans like steady income, debt ratio, repayment capacity, credit score etc.