Emergencies come in all shapes and forms, be it a medical ailment, an accident, or unexpected repairs. And if you are not adequately prepared, the emergency can burn a hole in your pocket, or worse, cause irreparable damage to your financial health.

This is when a personal loan can come in handy. Not only does it offer a significant sanction, but it also gets approved and disbursed almost instantly. In fact, you can use a personal loan even if you are not facing an emergency. With instant approval and quick sanction, personal loans are one of the most popular means of financing available today.

However, to qualify for this loan, you are required to meet the lender's personal loan eligibility criteria, in the absence of which an approval may be delayed or even denied.

To see where you stand in terms of your eligibility for a personal loan, use an online loan eligibility calculator. This is an online tool that helps you get an idea about the money you are eligible to borrow.

In case you find that your lender is offering you a lower sanction than what you require, check out these five handy tips to improve your eligibility and get the money you need.

1. Build and maintain a reasonably high credit score

Lenders consider your credit score as one of the most important eligibility criteria, as it offers a snapshot of your past credit behaviour. A score of 750 and above projects you as a responsible borrower, who has repaid past dues on time. This minimizes the lender's risk and, thus, increases your chances of approval. A score lower than 750 suggests that you have a substandard repayment record. This prompts the lender to categorise you as a high-risk applicant. This may trigger a higher interest rate or outright rejection of your application.

2. Pay your existing loans and credit card bills

Before applying for a personal loan, make sure that you reduce your existing outstanding debt as this increases your debt-to-income ratio. If you already have multiple loans and credit cards to your name, servicing another loan won't be easy. This leads the lender to believe that you don't have adequate income and that you may delay or default on repayment. A debt-to-income ratio of 15 per cent is considered ideal in case you are servicing a single loan at the time of applying for a personal loan. In case you have multiple loans to repay, the combined EMIs should not exceed 50 per cent of your income.

3. Include all your sources of income

Lenders also consider your income to be one of the important eligibility criteria for a personal loan as it helps them assess your ability to repay it. For this purpose, it's important that you showcase all your sources of income, not just your salary. This will help you prove to the lender that you have the necessary resources for timely repayment.

4. Avoid applying for multiple loans simultaneously

When you apply for a personal loan, lenders raise an inquiry with a credit bureau to assess your default risk. Such enquiries are hard enquiries and are listed in your credit report. Therefore, making multiple loan applications at once doesn't bode well as it projects you to be credit hungry. This makes you a high-risk applicant and lenders may reject your request for financing. So, it's best to evaluate your options, use an eligibility calculator, and apply for a loan that fits your needs.

5. Apply at a lender with a simple eligibility criteria

Finally, apply at a bank with the minimum personal loan eligibility criteria to increase your chances of getting an approval. For instance, Bajaj Finserv Personal Loan has the following eligibility criteria that is relatively easy to meet:

You must be a resident Indian aged between 23 and 55 years

You must be an employee at an MNC, public or private organisation

You must earn a regular income and meet the minimum salary requirements for the city you reside in

Once you meet the eligibility criteria, you only need to submit your basic documents to complete the application process.

Apart from easy eligibility, Bajaj Finserv offers up to Rs 25 lakh through its personal loan on a collateral-free basis. You can repay it over a flexible tenor of up to 60 months. With disbursal within 24 hours of approval, this loan is the fastest way to get finance for all your planned and unplanned needs.

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