Small Personal Loans are highly beneficial during a financial crunch or in emergencies. The documentation requirements are minimal. In some cases, you may get a Personal Loan without CIBIL and income proof. Moreover, they are unsecured loans that do not require any collateral, guarantor, or security. With several finance companies aggressively promoting instant Personal Loans, getting one feels like a child’s play. However, time is of the essence during a financial emergency, and the prospect of obtaining an instant Personal Loan can be a game-changer. 

Whether you need funds for an emergency or want to seize an opportunity, the speed of loan approval can make a big difference. Here is a comprehensive guide to help you master the art of securing an instant loan quickly.

Factors Affecting the Speed of Loan Approval

The speed of loan approval may fluctuate based on the following factors: 

• Lender Access: Online lending companies and their loan apps are the fastest, with approvals occurring in minutes. Physical lenders require more time to process loan applications.
• Creditworthiness: Credit score is a crucial factor indicating your payment history, existing debts, credit age, etc. A decent credit score significantly enhances your chances of approval.
• Income and Employment: Loan providers confirm your income stability to determine repayment capacity. These include your monthly income, employment history, and additional income sources.
• Debt-to-Income (DTI) Ratio: The DTI ratio measures your total monthly financial obligations in relation to your gross income. A lower DTI ratio indicates greater financial flexibility to accommodate an additional EMI.
• Loan Purpose and Amount: The amount you seek to borrow and the intended fund usage influence the loan approval speed and process.
• Collateral: Since small Personal Loans are unsecured, they are easier and faster to obtain than secured loans. 

Helpful Tricks for Faster Loan Approval

Here are some effective tricks to get a faster loan approval:

Apply Online

The offline loan procedure involves physically visiting the lender’s branch office and submitting the necessary documents and forms. Conversely, with an online loan application, you can apply for a loan from anywhere, anytime, using your laptop or smartphone. The online application process requires just a few clicks, which speeds up the approval and disbursal. It eliminates the need for long queues and physical paperwork. 

Add a Co-Applicant

Adding a co-applicant to the loan application enhances your eligibility and results in a swifter approval process. If you do not fulfil the lender’s eligibility criteria, add a co-applicant with a stable income, longer credit history, and stronger credit score to enhance your eligibility. It minimises the chances of loan rejection and saves you from restarting the process all over again.

Limit Your DTI Ratio

Lenders check your DTI ratio to determine your loan repayment capacity. It indicates the ratio of your monthly income to your existing financial obligations. Ensure your DTI ratio is within an acceptable limit to attract a quicker loan approval. 

Typically, a DTI ratio below 40-50% indicates a strong financial position, increasing your creditworthiness with more disposable income to repay the EMIs. Paying off existing credit balances effectively minimises your financial obligations and reduces your DTI ratio.

Maintain a Healthy Credit Score

Meeting the lender’s eligibility criteria and maintaining a decent credit score lets you obtain instant loan approvals from most loan companies. Credit bureaus calculate your credit score based on your credit mix, credit age, repayment history, and portfolio diversity. Making timely repayments is the best strategy for maintaining a high credit score and attracting easier and faster loan approval.

Show All Income Sources

Lending institutions verify your income sources to determine your financial stability and evaluate your repayment capacity. While most lenders ask for proof of your primary income stream, showing additional income sources like interest, dividends, rental income, etc., enhances your eligibility and lets you get loan approval faster. 

Avoid Multiple Applications

Applying for several loans simultaneously projects you as a credit-hungry borrower with an unreasonable desire for credit. It significantly affects your credit profile, causing the finance companies to reject your loan application. Instead of resorting to impulses when requiring funds, check your eligibility with selected lending institutions and consider applying with one offering the best loan deal.

Choose the Shortest Possible Repayment Tenure

Using a Personal Loan EMI Calculator, choose the shortest possible repayment tenure with budget-friendly EMIs. A short repayment time frame reduces your default potential due to massive changes in financial affairs. Consequently, lenders view you as a safer borrower and approve your loan application quickly. However, ensure your repayment plan has EMIs that conveniently fit your monthly budget. 

Seek a Loan from Your Existing Lender

Applying for a loan from your existing lender may help you get a Personal Loan without CIBIL and physical income proof requirements. Your consistent repayment history with the lender makes them feel confident about approving your loan quickly without additional formalities and documents. Your past relationship with the lender establishes your creditworthiness and financial stability, encouraging them to sanction a quicker loan approval.

Seek a Suitable Loan Amount

Choose your loan amount mindfully. Ideally, it should be easy to repay and enough to cover your financial needs. An unnecessarily big loan amount can over-burden your finances and make repayment difficult. Asking for a bigger loan amount is one of the major reasons for loan rejection or approval delays. 

Keep the Documents Ready

Prepare all the necessary documents before applying for a loan. Common documentation requirements include identity, income and address proof. Keeping the scanned copies of these documents ready ensures a quick and smooth approval process, reducing any chances of delays. Furthermore, look for a lending institution like Hero FinCorp that supports a 100% digital application procedure and requires minimal documentation, resulting in faster loan processing.

Securing instant small Personal Loans requires a combination of thorough research and strategic planning. Following the tips in this article can influence your application and put you in a better position to get approval quickly and seamlessly. Whether it’s a financial urgency or a limited-time opportunity, securing an instant Personal Loan ensures meeting those needs efficiently and promptly.