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5 Things to Consider Before You Re-apply for a Personal Loan

 

A personal loan is the only loan that does not require any collateral and can be used for multiple purposes. Unfortunately, when you apply for a personal loan at a financial institution and it rejects your loan application, it is under no obligation to specify reasons for the same. A large number of personal loan applications get rejected in their first attempt due to numerous reasons. You just need to fix these reasons and reapply for a personal loan. However, while reapplying you have to make sure that the mistakes are not repeated. Here are a few things to keep in mind when you are re-applying for a personal loan so that you can go through the process without any hassles.

 

          1.    Fix Your CIBIL Score

 

our CIBIL Score is the one that denotes your previous credits. A good credit score means you make timely payments towards your EMIs. On the other hand a bad credit score leads to rejection of loans. Low CIBIL is one of the most common reasons behind the rejection of personal loan applications. But what happened in the past can’t be undone but steps can be taken to improve it. So, if you had not checked your score in the first instance, get your CIBIL score checked before you apply for a loan again. To improve your score you need to be timely with all your payments.

 

      2.    Pay Attention To Your Credit Mix

 

Credit mix refers to the types of accounts that makes up your credit report. It is a combination of the types of credit that you have including credit cards, student loans, automobile loans, and mortgages. Lenders look for a right mix of secured and unsecured loans in the borrower's credit history. But if you, the credit mix does not add up according to the lender's requirements. Such loan applications get rejected. You can take the help of a credit report for suggestions on having a good credit mix and make it easier for you to get approved for a loan.

 

      3.    Make Regular Repayments

 

You must take care never to miss your loan repayments because you will not only be charged with a non-payment penalty but also be charged a hefty interest on the unpaid amount. An individual's credit score and loan repayments go hand in hand. Delays in loan repayments can affect negatively on your credit health. Missing an EMI or payment delays are among the key factors that can impact your credit profile and hinder your chances of getting a loan in the future. To improve your chances of getting an instant loan you need to start making regular repayments towards your existing loans and credit cards. This will help improve your credit score and you can reapply for an instant personal loan with ease.

 

4.    Avoid Credit Hungry Behavior

 

If you have applied for multiple loans and cards in the recent past, the lender might see this as credit hungry behaviour when going through your credit history. You need to avoid financing all your expenses solely through your credit. If your loan application gets rejected, be very careful with the kind of applications you apply for. Apply for an instant personal loan only when you genuinely need credit and not for extravagant expenses. Preferably, the number of loan enquiries should match with the number of the current loan(s) and credit card(s). If there is an imbalance in this equation the lenders will deem you as unworthy of credit.

 

5.    Check Your Credit Report

 

Before applying for a loan you need to ensure you have a good credit score to check this you can log in through the CIBIL website. All you need to do is to go to the website, enter all the required details and make the payment to get your online CIBIL Report. You need to review your CIBIL report very carefully. Make sure the report is up-to-date and has no errors. It is possible that your credit report may contain some mistakes which may have a negative effect on your credit score. If there are any errors, immediately write a letter to the CIBIL requesting to rectify any errors in the credit report. CIBIL is legally obligated to investigate regarding the dispute claims and to correct the mistakes if there are any.

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