Personal loans can be very helpful to fund several needs and requirements. Many people apply for a personal loan to finance several needs of theirs. However, unfortunately, some applications that have been submitted by a few individuals get rejected. This could happen due to several reasons such as credit score, repayment history, previous interactions with the bank/lender. A flexi loan as well can come in handy to meet the financial needs of many. However, before applying for another personal loan, it is important to be mindful of a few factors. Let us have a look at the 5 factors that you should definitely keep an eye on before reapplying for a personal loan.
5 Factors to Check Before Reapplying for a Personal Loan
1. Check your credit score
One of the most important factors to keep a close eye on is your credit score. The credit score is a 3-digit number that represents your financial habits and can directly translate to your creditworthiness. Typically, it is recommended to have a credit score above 750. So, before reapplying for a personal loan, ensure to bring up your credit score to that of or more than 750. This would increase your chances of getting your loan request approved. Moreover, to improve your credit score, ensure to pay your credit card bills and EMIs on a timely basis. You can also consolidate a huge debt to improve your credit score.
2. Inspect your credit mix
A credit mix is typically the type of credit that you have on your portfolio, which is usually a combination of secured credit and unsecured credit. In case you only have personal loans and credit cards on your credit mix, then the chances of your personal loan application getting rejected are high. So, ensure to have the right credit mix before reapplying for a personal loan.
3. Be timely with your payments
Many people default when it comes to being on time with making their payments for their dues. However, it is a very important factor that is considered crucial by banks and lenders as a factor to approve personal loans. So, if you have credit cards, ensure to pay the dues on time. IF you have taken any personal loans or any other type of loan, make sure to pay your EMIs every month by the due date. Following such timely payments consistently over a period of time would inevitably improve your credit score thereby increasing your chances of being granted a personal loan.
4. Stay within your credit limit
While you follow healthy credit habits, your credit score improves. As your credit score improves, you will be granted a higher credit limit. While you are in such a situation, ensure to avoid overusing credit. Always ensure to keep your credit utilization ratio to 30%. If you maintain a low credit usage, it would be easier for you to pay your dues and also maintain a good credit score throughout.
5. Consider short-term loans
If you need the personal loan for an immediate cause or an emergency, you could consider a short-term loan instead of having to wait for a certain period of time and reapplying for a personal loan.
In a nutshell
A personal loan or a flexi loan can help in meeting several financial needs. While certain personal loan applications may get rejected, there is always a way to improve the chances of getting the next personal application accepted. You can avail of a personal loan on Finserv MARKETS as it can help you avail of a personal loan quickly. In addition, you can avail exciting benefits like attractive interest rates and minimal foreclosure charges.