The inflation rates in India have sky-rocketed in the past few years. These inflation rates are calculated on the basis of the average increase in the cost of living or the increase in the overall prices of goods and services in the country. Now you might be wondering that how does the increasing inflation rates fit into the picture of banking and finance.
The answer to this question is that when the inflation rates in a country increase above a certain number, the banks and NBFCs (non-banking financial companies) increase their rates of interest on a loan product, along with enforcing stringent loan approval measures. Thus, in such times, getting a personal loan through a financial institution can prove to be quite a hassling task. However, if you follow these few tips, then you can easily obtain a personal loan, even in these tough economic times:
- Work on your credit score: You might have already heard about it more than often; however, I will say it again, “Improve your credit score”. The reason being; financial institutions scrutinize your credit score before lending you with financial assistance. After all, a good credit score indicates a great repayment history and further assure the lender that you will make timely repayments on your installments. CIBIL is the credit rating agency in India that will provide you with a credit score; make sure that you credit score is above 750 to not only obtain a personal loan but also renegotiate on the interest rates. There are numerous easy ways to improve your credit score, one simple search on the internet should be able to find all you need to better your score.
- Arrange your documents: As a wise man once said that putting in your best foot forward will never do you any bad. In a similar way, putting in your documents and presenting them in the best way possible won’t cause you any problems; in fact, it will increase your chances of obtaining a personal loan. The reason being; if you have all the required documents and are geared up to face the questions against any potential red-flags in your credit history, you will be easily able to obtain financial assistance from the banks and NBFCs (non-banking financial companies).
- Choose the correct lender: There are a ton of financial institutions in the market that provide financial assistance for the people in the forms of personal loans. Thus, make sure that you look around to find the best form of financial assistance at the lowest possible interest rates and processing fees. Further, each and every lender has different set of eligibility criteria; thus, even if one of them rejects your loan application, you can always gear-up and prepare to look out for another financial institution.
Therefore, even though the times are tough and inflation rates are rising with each consecutive year; you must always save money to cruise through such times. And if you ever find yourself in a tough spot and it seems too hard to get out from it; make sure that you are ready to avail financial assistance in order to get out of it.