A personal loan has for decades been a rescuer for those who face unexpected financial needs and are not able to meet their financial goals with their own resources. To deal with these circumstances, the credit profile of the applicant should always be ready to secure a personal loan whenever in need. Particularly, if you want to take a loan from top banks of India since they provide more and better offers, you must qualify for SBI Personal loan eligibility as SBI is the top public sector bank of India.
When in need of a personal loan, if your credit profile is poor, you can take important corrective measures to make it better and then apply and get a personal loan. Here, we will discuss some important points to boost the credit profile of applicants for personal loans:
Improve your credit score:
Credit score is amongst the first yardsticks bases on which lenders test a personal loan application during evaluation. The applicant’s credit score should be good in order to further proceed with other vital steps of the loan application’s evaluation. Applicants looking for personal loan with a credit score of 750 or above mostly have brighter chances to get a personal loan than others who have a credit score below this mark. Personal loan applications with poor credit scores either face rejection or get accepted as a loan at a high interest cost to counterbalance the lender’s risk.
Moreover, the credit score of an applicant also affects the interest rate of a personal loan. Even lenders have started offering preferential rates to applicants having a good credit score due to the lesser involvement of risk to lend. In line with this practice, SBI personal loan interest rates also vary on the basis of the applicant’s credit score. There can be a big difference when it comes to personal loan interest rates for the same loan amount due to varying credit profiles.
Therefore, ensure to build and maintain a strong credit score to boost your SBI personal loan eligibility and improve your chances of taking a personal loan on low-interest rates. To achieve this goal, start practising healthy credit habits like repaying your EMIs and credit card bills full by the due date, do not let your credit utilization ratio cross 30%, and avoid multiple credit inquiries within a short span, etc.
One should also review his/her credit report at regular intervals, at least once every three months. It can give you sufficient time to take steps to improve your credit score is required. Sometimes incorrect information in your credit report can make an adverse impact on your credit score. Hence ensure to inform the concerned bureau and bank if you come across any kind of incorrect information in your credit report in order to get it rectified soon. An updated credit report will then automatically display an improved credit score.
Other than these, consumers should otherwise also develop the practice to review their credit reports at regular intervals, especially those planning to get loans in the forthcoming period. Consumers will be able to monitor their credit score by reviewing credit reports and taking adequate steps to improve or maintain their credit scores near or above the usual benchmark of a good score of 750. Consumers/applicants can get access to free credit report once a year from each of the four credit bureaus in India. They can also get free credit reports from online lending marketplaces.
Boost your Eligibility:
Fulfilling the eligibility criteria of lenders like SBI personal loan eligibility is a must to get your loan application considered and eventually approved by lenders. Knowing the eligibility criteria of lenders is important, especially for those who are planning to secure a loan in the near future. Eligibility criteria could vary from one lender to another, but there are some common requirements for all lenders which every applicant needs to fulfil. SBI Personal loan eligibility criteria vary according to the type of applicant and loan scheme, but basic requirements for applicants tend to be similar, pertaining to age bracket, income etc.
Apart from these criteria, an applicant needs to submit documents with SBI personal loan application form which are- as an Identity Proof: Passport, PAN, Voter Identity Card, Driving License, Aadhaar Card, for address proof: Ration Card, Bank Account Statement, Passport, Driving License, Electricity Bill, Telephone Bill, Sale Deed/Property purchase agreement (for owned properties), Aadhaar Card and to prove your income statement of bank Account, salary Slips, ITR, Form 16. A lender could demand additional documents as per requirement.
Debt to income ratio:
Lenders tend to consider personal loan applications with lower debt to income ratios as favourable. If you are spending a major part of your income to pay your debt, you will be considered a risky borrower by the lender. To meet eligibility criteria and fetch SBI personal loan interest rates, one should ideally not spend more than 50% of monthly income on EMIs (including new loan EMI), as spending more than that could force you to take a costly loan for your unavoidable financial needs or make it difficult to handle a high level of EMIs when compared to an inflow of monthly income.
To decrease your debt-to-income ratio, either pay off all or at least some of your current loans and credit card bills in full and/or opt to convert credit card bills or big purchases into EMIs.
If you get a personal loan even after having a high debt to income ratio, it is likely to involve high interest costs and may not be good for your financial health. For instance, if you secure and come out as eligible according to SBI personal loan eligibility criteria, the SBI personal loan interest rates would usually be higher in such cases.
Lender relationship:
Your relationship with a lender could play a significant role to secure a personal loan. Many lenders give concessions and lucrative offers to loan applications of their own customers. Hence, you should begin with enquiring with lenders with whom you have shared an existing or previous relationship before going to other lenders. There are several types of relationships you can share with a lender, like saving/ current account, fixed/ recurring deposits, loan/ credit card account etc.
SBI personal loan eligibility criteria could become easier to crack for you if you share a customer relationship with SBI. Many lenders offer personal loans at a lower interest rate to their existing customers, thus making it a favourable deal for existing SBI customers. Apart from SBI personal loan eligibility criteria, sharing a relationship with SBI can also help you get a lower SBI personal loan interest rate.
