How to Increase the Chances of Getting Your Personal Loan Approved

Posted in Lending Articles By Sajhyadri Chattopadhyay-
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Getting a personal loan approval can feel like navigating a financial maze, but with a strategic approach, you can significantly enhance your chances. By incorporating certain strategies into your financial habits, you not only enhance your chances of personal loan approval but also lay the foundation for a robust and sustainable financial future. Remember, each financial decision you make contributes to your overall financial narrative, and responsible choices can lead to greater financial opportunities. 

How to Improve Your Chances of Getting a Personal Loan

Here are some key tips that can help increase your likelihood of personal loan approval – 

  • Maintain a Stellar Credit Score:

Your credit score is a crucial factor influencing loan approval. Aim for a credit score above 750, showcasing your creditworthiness. Pay your bills on time, keep credit card balances low, and rectify any discrepancies in your credit report. A higher credit score reflects responsible financial behaviour, instilling confidence in lenders.  

  • Reduce Your Debt-to-Income Ratio:

Lenders calculate your debt-to-income ratio by comparing your income to your monthly debt repayments. Aim to keep this ratio below 30%. Paying down existing debts, such as credit card balances or outstanding loans, demonstrates financial responsibility and improves your capacity to take on additional debt. 

  • Sustain a Stable Income and Employment:

Lenders prefer borrowers with a stable income source and employment history. Ensure a steady income stream by maintaining consistent employment. If you're self-employed, showcase a reliable business income. Stable employment and income not only boost your loan approval chances but also indicate your ability to repay.  

  • Avoid Multiple Loan Applications:

Resist the temptation to apply for multiple loans simultaneously. Each loan application triggers a hard inquiry on your credit report, potentially lowering your credit score. A sudden influx of loan applications may raise concerns among lenders about your financial stability or potential overreliance on credit. 

  • Limit Financial Inquiries:

Before applying for a personal loan, assess your financial health and address any issues that might raise red flags. Be proactive in managing your finances and limit the number of financial inquiries on your credit report. A focused and disciplined financial approach signals responsibility to potential lenders.  

  • Cultivate a Positive Lender Relationship: 

Building a positive relationship with your lender can work in your favour. Communicate openly, provide required documentation promptly, and demonstrate your commitment to responsible borrowing. A good rapport with your lender may lead to more favourable terms and increased confidence in your repayment ability. 

  • Showcase Assets and Collateral:

If applicable, consider offering assets or collateral to secure the loan. This provides an added layer of security for the lender, potentially increasing your chances of approval. Assets could include property, investments, or other valuable possessions that lenders may view as a guarantee.  

  • Demonstrate Financial Discipline: 

Exhibit financial discipline by maintaining a consistent savings pattern. A healthy savings history showcases your ability to manage money and provides reassurance to lenders regarding your financial stability. This disciplined approach can positively impact their decision-making process. 

Why is Your Personal Loan Application Getting Rejected

Here are key reasons your personal loan application might face rejection – 

  • Low Credit Score:

Your credit score serves as a financial report card, reflecting your creditworthiness. A low credit score, typically below 650, stemming from missed payments or outstanding debts, signals a higher risk to lenders. Prioritize improving your credit score by timely bill payments and responsible credit use.  

  • Multiple Loan Applications: 

Engaging in a flurry of loan enquiries or simultaneous applications can set off alarms for lenders. Each application triggers a hard inquiry on your credit report, potentially lowering your score. Lenders may view this as a sign of financial desperation or credit overreliance, leading to a rejection. 

  • Job Instability: 

Lenders consider your employment history and stability. Frequent job changes or gaps in employment may raise concerns about your ability to repay. Demonstrating a consistent and stable employment history enhances your credibility and increases the likelihood of loan approval.  

  • Insufficient Income: 

Lenders evaluate your income to ensure you have the financial capacity to repay the loan. Insufficient income relative to the loan amount sought can be a deal-breaker. Before applying, carefully assess your income against existing financial commitments to determine a feasible loan amount. 

  • High Debt-to-Income Ratio: 

Your debt-to-income ratio, which tallies your monthly debt repayments to your income, is a critical factor. A high ratio indicates that a significant portion of your income is already committed to debt repayment. Lenders may hesitate to add another financial burden, leading to a potential rejection.  

  • Inadequate Documentation:

Providing incomplete or inaccurate documentation is a common reason for loan rejections. Ensure all required documents, such as income proof, address proof, and identity proof, are accurate and up-to-date. Incomplete paperwork can create doubts about your financial stability. 

  • Existing Financial Liabilities:

Lenders consider your existing financial liabilities, including outstanding loans and credit card balances. A high level of existing debt may signal a risk, prompting lenders to question your ability to manage additional financial obligations.  


Understanding these potential pitfalls empowers you to address them proactively. By strategically enhancing your financial profile, you increase the likelihood of a successful personal loan application. Remember, a thorough and thoughtful approach is your best ally in navigating the loan approval process. For a hassle-free process with minimal documentation and fast application approval, apply for a personal loan online on Bajaj Markets. Step closer to fulfilling your dreams with the best financial support today! 

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