Nowadays, many people resort to personal loans to meet their short-term and long-term goals and needs. Whether a vacation to the dream destination or paying for a medical emergency, an instant personal loan is a one-size-fits-all solution to all contingent and uncategorised needs. Moreover, with advancements in the fintech sector, they are easily accessible too.
Did you know that salaried employees have a better chance of getting a personal loan than self-employed professionals? The primary reason behind that is their income and job stability. Salaried employees have a regular income, freeing the financier of any repayment concerns. Since timely debt repayment is the most crucial factor finance companies consider while granting a personal loan, salaried employees have the edge over others regarding loan accessibility. However, there are certain conditions you must consider while applying for a personal loan for a salaried employee. Below are a few of them.
Show Income Stability
When salaried employees apply for a personal loan, their employer’s reputation and work experience go a long way in getting loan approval at the best interest rates. Those who can show income stability with salary slips and account statements have a higher chance of approval than a fresher.
Build a Decent Credit Score
An individual’s credit score is an important marker of creditworthiness. Having an Experian credit score of 630 or above means a lower chance of EMI default, making the applicable more credible for a loan. So, before applying for a personal loan for a salaried employee, check your credit score on the website of any reputed lending institution. Contrary to popular belief, checking the credit score does not affect the chances of getting loan approval. Building a decent credit score is not hard, as paying the loan EMIs and credit card bills on time is enough.
Include All Income Sources
While applying for a personal loan for salaried, the applicant can include all the income sources besides their monthly job salary. Adding income sources from investments, part-time jobs, freelance work, rental properties, etc., increases the monthly earnings and improves loan eligibility. More income means higher repayment capacity, attracting better loan terms and conditions.
Reduce Financial Obligations
Finally, improve your personal loan eligibility for a salaried employee by clearing all the outstanding EMIs and credit card bills. Doing that reduces debt and automatically brings the debt-to-income ratio down.
Avoid Multiple Loan Applications Simultaneously
Some believe they can give themselves the best at personal finance by simultaneously applying for multiple loans. But in reality, it’s best to avoid doing this at all costs. Remember, each time they apply for a loan, the finance company pulls a hard inquiry on their credit report, which reduces their credit score. Credit bureaus list such inquiries on the credit report and share them with the lenders during a hard inquiry. Too many hard inquiries cut a negative figure for potential lenders and reduce the chances of approval despite good income.
Are you looking for a personal loan for a salaried employee? Avoid switching jobs for at least a few months before applying to improve eligibility and get the best interest rates. Prefer a finance provider like Clix Capital with attractive interest rates, a user-friendly online portal, and flexible loan tenures. Plan EMIs with a personal loan calculator before applying online.