Key decisions to take for striking the best personal loan deal

All of us, at some point in our lives, require urgent funds for varying purposes like a medical emergency, home renovation, or any other unplanned big-ticket expense. For such financial shortfalls, taking personal loans is mostly the first thought that strikes one’s mind when dealing with fund shortages or even financial exigencies. Even amongst various types of lenders, personal loans are usually a highly competitive segment catered to by almost all banks, NBFCs and emerging fintech, with widely varying Personal Loan Eligibility criteria. 

Thus, all this makes it imperative for prospective borrowers looking to Apply for Hdfc Personal Loan to takes the key decisions in the process to strike the best deal with the right lender:

Creation and maintenance of good credit score

Over the past decade or so, credit score has become one of the first crucial parameters factored in by lenders when evaluating any applicant’s personal loan application and checking if they qualify for the Personal Loan Eligibility criterion. Credit score’s role towards determining loan eligibility and approval chances has been becoming even more prominent with rising financial inclusion in the country. Applicants possessing a good credit score generally hold higher chances of loan approval as they are considered to be more financially disciplined and hence, possess lesser credit risk for the lenders. Some lenders also follow the practice of risk-based pricing, in which they provide lucrative rates to applicants having good credit scores. On the flip side, those with poor credit scores either face rejection or are charged higher interest rates to make up for the higher credit risk for the lender.

Therefore, ensure to build as well as maintain a good credit score in order to boost your personal loan eligibility as well as raise the chances of fetching lower interest rates. To do so, follow healthy credit practices such as:

  • Ensuring no irregularity in repayment of loan EMIs as well as credit card bills
  • Restricting credit utilization ratio within 30%
  • Periodically monitoring guaranteed or co-signed loan accounts
  • Not submitting multiple credit applications to lenders within a short period of time
  • Maintain a balanced credit mix 

Besides these healthy credit habits, developing the practice of reviewing your credit report at regular intervals is no less important. Doing so will allow you sufficient time to make corrective efforts, if required, to improve your credit score before you go ahead to Apply for Hdfc Personal Loan. What this practice does is also enables you to notice and get rectification for any incorrect information which has been adversely impacting your credit score. Upon quickly contacting the bureau and/or lender for such corrections, in return, you get a rectified credit report, which will reflect an increase in your credit score and improve your Personal Loan Eligibility.

Inquiring of offers and deals with financial institutions with whom you have an existing customer relationship

Amongst the scores of lenders offering personal loans, many also offer another variant, in the form of pre-approved personal loans at preferential rates, to those who qualify for the required Personal Loan Eligibility criterion. The presence of existing consumer relationships can be helpful in such cases, in varying forms like current, savings, salary or fixed/recurring deposit accounts or existing loans or credit cards. Hence, those looking to Apply for HDFC Personal Loan should kick-start their search process by first contacting HDFC bank if they share existing banking and/or lending relationship. Interest rates and other loan features offered by them can then further be used as a benchmark to compare the personal loan interest rates offered by other lenders.

Comparison of as many lenders as possible before submitting an application

With numerous personal loan offers to be present in the financial system due to almost all lenders offering this product, their interest rates widely vary amongst lenders. And, given that the credit evaluation process and risk appetite of lenders can vary too, the chances of personal loan approval and the interest rates charged for that loan would also differ widely across lenders and borrowers. Hence, those planning to Apply for HDFC Personal Loan should also first compare the offers from as many lenders as possible before selecting any particular lender. Compare numerous personal loan options available from prospective lenders, based on your Personal Loan Eligibility criterion like income, credit score, age, job and employer profile etc. Ensure to not restrict your comparison to just the interest rates but also check the processing fee, offered/eligible loan amount, loan repayment tenure, prepayment fees, etc., before submitting an application to any lender.

Qualification for lender’s minimum income criteria

Income is often the first parameter that lenders put in when an applicant goes for  Apply Hdfc Personal Loan.  Almost all loan products from varying lenders put forth minimum income criteria for loan applicants to be eligible as per the Personal Loan Eligibility criteria. Lenders may also require a specific minimum income per the applicant’s location. Those who do not meet this criterion usually face rejection even without being considered for other factors. As this criterion tends to differ across lenders, applicants should compare numerous lenders and their offers based on their monthly income and other eligibility criteria and then choose the one that fits the best.

Falling into the lender’s set age bracket

Apart from income,  lenders also put forth an age bracket in which applicant has to fall when thinking of  Apply Hdfc Personal Loan. Both the borrower’s current age and the expected age at the end of loan tenure while assessing loan eligibility are factored in usually. Those failing to fit into the minimum and maximum age bracket are usually denied a loan. Generally, applicants who are nearing retirement also often face difficulty in getting their loan application approved due to the usual dip in the income post-retirement, which increases the risk of loan default. This results in lenders usually preferring the completion of loan repayment during work-life years, i.e.before one retires. Applicants nearing retirement but requiring a loan can consider adding a co-applicant with a good credit profile and stable income to boost the overall loan eligibility and approval chances.

Having job stability

Another not to be ignored aspect of the personal loan eligibility criterion, which is often undermined by many applicants due to lack of awareness, is the importance of applicant’s job stability; lenders have a look at applicant’s employment history and job stability while evaluating their loan eligibility. Since frequent job-switches might be seen as a signal of having career instability, lenders may hesitate to lend to applicants who frequently keep switching between different jobs in short periods. 

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Danielle England

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