Financial habits that will make it easier for you to get a Personal Loan
Explore the various habits you should adopt to increase your chances of being offered a Personal Loan to meet your borrowing needs.
Applying for a personal loan can be a pretty daunting experience, especially if you have a lack of information of how the process works and more specifically, what you can do to improve your chances of getting your application improved. Listed below are a number of financial habits you are encouraged to adopt to have a better chance of getting a loan, as well as leading a more financially healthy lifestyle:
1) Maintain a Budget
Keeping track of your monthly expenditure will not only help you be more organized with your finances, but also help you understand your spending habits and the areas in which you are perhaps being more frivolous than needed. Even small things like measuring the cost of your weekly shopping lists can go a long way in being more informed and organized. This exercise will also help you identify the areas you can cut down on your spending if required.
2) Maintain a Good Credit Rating
To start with, it is important to know what your current CIBIL Score is, which can be achieved by filling out a simple online application form and paying a small fee. This will inform you about where you stand today and help you take action accordingly. Things you can do to improve your score include making sure you make all your EMI payments of previously taken loans on time and never missing any, as well as ensuring you close any unnecessary bank accounts you may have. It also means paying your credit card debt on time and not applying for too many loans and getting rejected for them. Lastly, your credit score will only be good if you have some financial history, which means that if you have never taken a loan or paid off any debt, your credit score will not be good.
3) Save As Much As You Can
This simple advice is also the most apt. Saving not only shows that you are sensible with your finances, but also ensures you have some funds saved in case of an emergency. Whether you have unforeseen medical expenses in the future or end up losing your job, this will ensure you are prepared to meet those circumstances.
4) Watch Your Expenditure
This may sound obvious but a simple principal that surprisingly few follow is to spend less than you earn. Many earners get carried away by their pay Cheque and with the help of credit cards and other credit facilities, actually spend more than they earn month on month. This is a significant indicator of someone who isn’t on top of their finances and will severely impact your chances of getting your personal loan approved.
5) Other Borrowings
It is important to minimize all other outgoings you may have in order to be in the best position to get your personal loan approved. All other EMIs and outstanding loans you may have must be paid off where possible since from a lender’s perspective, having other loans elsewhere not only indicates that you would be less likely to repay, but also is a sign that you are taking on too many liabilities making you a riskier customer. This means your loan application may get either rejected or you may be charged a far higher rate of interest on your loan.
The tips above are simply a few in a number of measures you can take to maximize your chances of being accepted for any form of financing. What’s more, they are general good practices to adopt to better manage your finances.