Article Categories

Improve your chances to get loans in India: What you need to know and Do?

in Finance / Loans by Rugved Agarwal on 07/05/2017

There is a famous saying which states ‘money attracts money‘. It is true to a certain extent. For any business to run, money is needed to pay expenses, buy raw materials, producing goods, etc. If you do not have money, you cannot run your business efficiently. Similarly, for an individual, the source of income is either salary or interest from investments. To earn interest, you need money to invest.

People are often left with the only choice of procuring a loan to meet their requirements. Though there are many financial institutions which provide a loan, it is not easy to get one. There are a lot of parameters which have to be complied with before one can avail the loan. At the same time, there are many measures which can help you improve your chances of getting the loan against your applications.

1. CIBIL report and Credit score

A credit score is an integral numeric indicator for any financial institution to consider loans in India.  

Higher the score, higher is the possibility to get a loan. The CIBIL report analyses the credit behaviour of an individual based on the payment history of loans and credit cards, defaults in payments if any, the current status of loans, types of loans, capacity or the manageable extent, etc. Depending on these factors, CIBIL report is made available for the financial institutions to analyse the loans. Thus, by improving your credit score, you can easily get a loan.

2. Controlled use of credit card

It is advisable to use the credit card to a controlled extent. By going overboard in your purchases and being unable to manage your payments is surely going to turn the table in an unfavourable manner. You can opt for a debit card instead of credit card to control your expenditure which will help you to gain credibility.

3. Making payment of any dues on time

If you are burdened by loans or any EMIs to be paid, you should try and make these payments on time. Defaults in payments not only affect your credit score, but also averts guarantors for your loan from taking the responsibility.

4. Have as little loans as possible

It is not a good practise to have multiple loans just because you can avail it for a good credit score. Do not take loans until and unless it is a dire necessity. Lenders are thwarted off if you have too many loans already on your head.

5. Maintain a mix of credit

Maintaining a healthy mix of secured and unsecured loans helps to increase your chances of getting a loan. Secured loans though are kind of a guarantee to the lender. Unsecured loans, on the other hand, are overpriced. It is necessary to maintain a balance between the two.

6. Monitoring the joint accounts and loan accounts of those you guarantee for

For a person holding joint accounts, any defaulter by the joint holder affects your credibility. If you have been signed as a guarantor for someone else‘s loan, any default on their part may also affect your credit leverage.

Apart from the above, you should not give in your application again and again after it has been rejected. This creates a wrong reputation and spoils chances of your loan procurement in future also even though it might be for a different reason.

About The Author

Credit score is one of the important factors which plays a vital role when applying for a home loan. Grihashakti provides you with many measures which can help you to improve your chances of getting the loan against your applications.

No of Views : 78