How to increase your eligibility for a personal loan? Here are 7 ways

livemint.com:

Securing a personal loan is based on various factors that lenders evaluate to determine your capacity to repay the loan. There are various steps you can take to enhance your eligibility for a personal loan and potentially secure more favourable loan terms, such as lower interest rates or increased loan amounts. Here are some essential strategies:

By adhering to these steps and showcasing your financial responsibility, you can enhance your eligibility for a personal loan and potentially obtain a loan with more favourable terms tailored to your needs.

Submitting multiple loan applications in a brief timeframe can adversely affect your credit score. It’s advisable to pre-qualify with lenders to determine if you meet their initial criteria before submitting a formal application. 

This is because each official loan application results in a hard inquiry on your credit report. These inquiries can remain on your credit report for up to two years and may reduce your credit score, particularly if there are several inquiries within a brief period. A diminished credit score can make you a less appealing borrower and might result in loan denials or elevated interest rates. Additionally, lenders perceive multiple loan applications as an indication of financial desperation. This can raise concerns and decrease the likelihood of approval for any of your applications.

Furthermore, applying to multiple lenders can be overwhelming and make it challenging to keep track of loan terms and compare offers accurately. You might ultimately accept a loan with unfavourable terms due to fatigue from the application process.

Personal loans provide numerous benefits that make them suitable for various financial circumstances. Here's an overview of the