Getting a personal loan for a large amount is not easy. Banks and NBFCs check your financial status and creditworthiness very closely. But if certain things are taken care of, then getting a loan for a large amount can be easy. Whether you want to expand your business or want to make a big expenditure, by adopting these methods, you can ensure the approval of your personal loan.
Improve credit score
The first condition for loan approval is your credit score. If your score is more than 750, then banks consider you trustworthy and also give you low interest rates. Paying bills and EMIs on time, using credit cards limitedly, and not applying for loans frequently increase your credibility. The better your score, the easier it will be for you to get a big loan.
Control the debt-to-income ratio
Banks see from your debt-to-income ratio how much of your salary is already going into EMIs. If a large part of your income is already being spent on repaying loans, then the chances of getting a new loan are reduced. Try not to spend more than 40% of your total income on EMIs. This shows that you are a responsible borrower.
Show stability in income and job
Banks trust customers who have a stable job and regular income. If you have been working in the same company for the last two to three years, then it is a plus point for you. Frequent job changes indicate instability to the bank. On the other hand, clean tax returns and audited accounts prove to be very helpful for self-employed people.
Increase repayment capacity
The higher your repayment capacity, the easier it will be for you to get a bigger loan. Try to repay smaller loans first and choose a long-term loan so that the EMI is lower. This will leave you with more money to spend, and the bank will be confident that you can handle additional loans. The interest rate is also lower for good repayment capacity.
Keep documents complete and updated
Incomplete or outdated documents can be a major hurdle in a loan application. Submit recent salary slips, bank statements, ITR, and identity proofs properly. Audited accounts and GST returns may also be a must for those in business. The right documents not only speed up the process but also make your application stronger.
With the right preparation and financial discipline, it becomes extremely easy for you to get approval for a large personal loan. It is not just about having a good score, but it reflects your entire financial behaviour.