Applying for a personal loan can seem daunting, especially if you have recently started a new job, relocated to a new city or started a business. In 2025, the personal loan landscape is evolving making it easier. With digital lenders, AI-driven credit scoring, and alternative lending options it is easier than before to secure financing. However, improving your chances of getting approved for a personal loan still requires strategic planning and understanding of the approval process.

In this blog, we’ll explore how you can improve your chances of getting a personal loan approved in 2025, using proven techniques that lenders appreciate.

Understand Your Credit Score and Work to Improve It

Your credit score remains one of the most important factors in personal loan approval. In 2025, a good credit score is more important than ever, as many lenders now offer personalized loan terms based on your score. To improve your chances of approval, ensure that your credit score is above 650.

Check Your Credit Report: Ensure there are no errors or discrepancies that could be lowering your score. You can check your credit score using the links below. Simply key in your personal details like your PAN card number, date of birth, and mobile number to get the report.

• CIBIL (TransUnion CIBIL)
  Visit www.cibil.com to access your credit report. You are entitled to one free credit report per year under RBI regulations.
• Experian
  Access your report at www.experian.in. Experian also provides one free credit report annually.
• Equifax
  Check your credit report on www.equifax.co.in.
• CRIF High Mark
  Visit www.crifhighmark.com to obtain your credit report.
   

Pay Your Bills on Time: Your payment history can account for 35% of your credit score.

Reduce Credit Utilization: Keep your credit card balances below 30% of your available credit limit.

Focus on Reducing Your Debt-to-Income (DTI) Ratio

Lenders calculate your DTI ratio to evaluate your ability to manage monthly payments. The lower your DTI, the better your chances of getting approved. In 2025, many lenders prefer a DTI of less than 36%, although some may accept up to 40%.

• Pay Down Debt: Focus on paying off high-interest credit card balances.

• Avoid New Debt: Try not to take on new debt during the application process, as it could negatively impact your DTI.
   

Increase Your Income or Apply with a Co-Signer
If your income is on the lower end, consider increasing it or applying with a co-signer. A co-signer with a strong credit score and income can help secure your loan approval and may even lead to lower interest rates.

• Side Gigs: Explore opportunities for additional income, such as freelance work or part-time jobs. It is partially considered if it reflects in the bank account statement.

• Co-Signer: A co-signer can help if your credit score or income is insufficient for approval.

Be Transparent About Your Financial Situation

In 2025, lenders are more likely to approve applicants who are honest about their financial situation. Don’t hide negative aspects of your financial history. Instead, address them directly by explaining any past issues and outlining steps you’ve taken to improve your financial health.

Choose the Right Lender

Not all lenders have the same eligibility criteria. Traditional banks tend to have stricter requirements, while online lenders, fintech platforms, and peer-to-peer lending services may offer more flexibility. Research your options carefully to find a lender whose eligibility requirements match your financial profile. Speak to our loan experts to find the most suitable bank for your profile.

Prepare to get a Personal Loan at good terms

Getting the right amount at the right interest rate requires more than just filling out an application for a personal loan. By focusing on improving your credit score, reducing your debt, and working with the right lender, you can increase your chances of securing the loan you need. Start preparing early, and take steps to improve your financial standing before applying.