Life is full of uncertainties, and there are no guarantees. The fact is that usually, after you take out a loan, you might need to take out another as soon as possible. Few people, however, understand that there can be a financial emergency that may force you to take out another loan in the future. You can apply for a top-up personal loan when you need an additional loan.
If you want to take out a new loan, you can apply for a top-up personal loan through the same lender who approved your original loan. Additionally, you can also calculate top-up personal loan EMI by using an interest calculator. Top-up personal loan is a great way to access additional funds when you are still repaying your existing loan and you can also get a personal loan tax benefits. It is possible to use the funds from the loan to pay for any additional expenses and financial requirements you might have. Individuals may need to borrow money more than once in their lives as their needs evolve. If you took out a personal loan a few years ago, there is no doubt you will need another one soon.
It is a good thing, therefore, that lenders pay close attention to the repayment status of your existing loans and send you regular notifications of personal loan offers, either via email or mobile phone. Top-up loans, which are an addition to the existing loan amount, are useful only if the sanctioned amount is sufficient to pay for the pending needs.
Listed below are some of the ways that will help you to increase your top-up personal loan eligibility
Increase your credit score and payment history
A credit score, which a credit bureau generates, is the first parameter to determine whether a loan application is successful. CIBIL is a credit score based on a numerical summary. A CIBIL score can range from 300 to 900 points. It is usually considered good for top-up personal loan to get approved if you score above 750. The ability to pay off your debts on time is one of the most effective ways to ensure that you have a decent CIBIL score. A good score will ensure that you can access funds whenever needed. It is also important to note that the lender will check your repayment history and see how many credits you are currently handling.
Avoid excessive debt
The amount of debt you accumulate will appear on your bank statement if you run up excessive debt, including credit card debts. The lender may not grant you a top-up if he feels that the total amount of your EMI will be more than 50% of your net monthly income.
Make sure that your monthly budget stays in check. It is a good idea to refrain from spending too much on discretionary items. That will enhance your savings and help you manage your budget better. If you have excess funds, you may use them to reduce your credit card debt. This information will give you a better look at your bank statement and a better chance of getting approved for a top-up personal loan.
Get a reasonable loan amount
It is very important to make sure you apply for a top-up with a reasonable amount when you decide to make the application. These steps will increase your chances of getting approved for the loan in the long run. If you request a higher amount during the application process, the lender may doubt whether you can repay the loan and deny your application.
Lesser Obligations & Expenses
It is also crucial to get a handle on your costs and reduce the number of financial obligations you have if you want the amount of your top up personal loan to be enhanced. Your current obligation for your personal loan is already present there. In addition, the lender will be aware of the total balance due on any credit cards you use to pay for the purchase. If you have used the available credit on your credit card too frequently, your eligibility for a top-up personal loan may be significantly lower.
It is possible to negotiate for a better interest rate on a top-up loan if you have a good repayment track record and credit score. It is essential to make sure that all payments for the top-up personal loan have been made on time. It will ensure that you maintain a good credit score of 700 or better. Generally, lenders will accept your interest rate terms as long as you have a good credit record.