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Although, opting for a personal loan is quite easy, yet there are chances that your application might get rejected. To ensure your consumer finance is approved in no time, here are some useful tips to follow.
Of course, it is understood that bank or financial institutions are not going to process your consumer finance application if you don’t meet the eligibility criteria as decided by the respective lender. A lot of the applicants do not look at the eligibility criteria and apply for PL even though they are not eligible for it. Due to this, not only lender rejects your application but also your credit score takes a hit.
Before applying, you should check the eligibility criteria for every lender you are willing to apply to, and then apply only if you properly meet every single criterion. Usually, the minimum age for applying for personal finance is 21 years, and the maximum age is 60-65 years. Also, the borrower should earn a required minimum income annually. In addition to this, there should be any default on previous credit card dues and loan payments. In short, the applicant must have a clear credit history to be eligible for PL.
A credit score is yet another important factor that lender takes into consideration in deciding whether or not to approve your loan application. All banks in the UAE can access and view your credit report. Your credit history basically keeps a record of all your existing credit cards, finances, missed or late repayments, and also the previously mentioned debt-to-income ratio. To maintain a good credit score, pay your credit cards bills and any other repayments on time. The more punctuality you’ve on your repayments, the higher your credit rating will be.
However, you can also check your credit report if you would like to make sure that there are no errors in your credit report since they might be the reason for your loan application rejection.
Try to maintain a gap of at least six months between a new PL application and the previous ones. Plus, do not apply for consumer loan when you already have another one in your name. Reason being, lenders will see this as an additional burden on your finances and they may doubt on your repayment abilities, thus, they might reject your application.
You should always apply for a finance amount as per your repayment ability. Applying for a higher amount may lead to the rejection of your loan application. Before sanctioning you PL, banks or lenders check your ability to repay the personal finance based on your monthly income. If you apply for an amount that is unnecessarily high, then chances of your loan application rejection are higher. So, it is advised to check that if you can comfortably make the repayment in the tenure period, and then only apply for that much amount.
It might sound great to apply for PL to several banks or financial institutions at the same time so as to increases the chances of being approved by at least one bank or lender. But in actual, this is not a good approach. When you follow this technique, potential loan provider gets the feeling that you are credit hungry and need to apply to multiple sources to fund all of your expenses. Moreover, multiple applications without corresponding approvals may also affect your credit score negatively. Be sure you only apply for PL to a lender where the chances of approving your loan application are higher.
Even though consumer loans require minimal documentation now these days, there are still a few important documents that you need to submit with your PL application. Banks or financial institutions usually ask for income proof, identity proof, address proof, and bank details. So, keep all the required documents ready before applying. Because several times lenders reject the application due to the faulty documents. However, you can also check the official website of the respective bank or financial institutions to see the list of all the required documents.
Since there is an eligibility criterion involved, you must do thorough research regarding which bank or financial institution’s eligibility criteria you match perfectly. Also, do not forget to check which lender is offering a personal loan in UAE at lowest interest rate and which one has good reviews. With all this, you can opt for the best consumer finance in the UAE.
All these numerous factors such as your monthly income, repayment ability, job stability, credit score, etc. are taken into consideration while approving your loan application. A clear understanding of the nature of PL and all the aforementioned tips regarding the approval of the finance will definitely reduce the chance of loan rejection. So, apply to banks or financial institutions patiently, and needlessly to say, opt for a low personal loan interest rate as it will ultimately help you to make the loan repayment easily.