When an application for credit is rejected it can be a frustrating, stressful, and even an upsetting time.
While no credit provider – even the ones that offer “pre-approval” promotions – can tell you before you apply whether you will be successful, we can help you to understand the degree to which your personal loan application is likely to succeed.
Here are five tips to help you get your [name] personal loan approved.
Improve Your Credit Rating
In today’s world, with unprecedented access to the information credit reference agencies hold on file about your financial behaviour, it’s definitely worth making sure your credit rating is as good as it can possibly be prior to applying for a loan.
The first step should be to check your credit file.
The key things you should look for to improve your credit rating are:
- That your personal details are correct and that all information is up to date.
- That you recognise all of the financial accounts that are present and that you are the one responsible for them.
Simply undertaking these two checks can make a vast difference to your credit report.
Manage Your Finances
This could easily fall under the banner of improving your credit rating, but when looking at something so potentially important it is good to look into what is one of the more specific areas of your credit rating.
Managing your finances can be split into two areas:
- Managing your finances in terms of your regular income.
- Managing how you use any existing credit you have access to.
Both points can influence whether your personal loan is approved.
You could start by checking your credit file (see above). Also consider, how many times you have applied for credit in the last 12 months, outstanding balances and payment history on credit cards, and previous financial account history.
For you, the golden rules to follow are:
- Don’t apply for credit excessively, especially if you don’t particularly need it.
- Where you do have credit, be sure to keep up with repayments.
- If you have credit cards, don’t run them “maxed out.” A good guideline is to look to keep your cards at around 20 – 25% of their credit limit, and always pay off the full amount each month.
- If you can make additional payments on any accounts, then do so.
By effectively managing your finances, you’re showing potential lenders that you’re in control of your finances and are likely to be a good borrower.
Check Our Eligibility Criteria
If you’re going to apply for a [name] personal loan product, then you should look at our eligibility criteria prior to your application. We recommend doing the same whomever you plan to apply to for a personal loan.
By checking whether you are eligible for a loan, you will avoid having a credit application logged on your credit record unnecessarily if you’re unlikely to be successful.
If you are unsure that you meet our eligibility criteria, contact us today to speak with one of our personal loan specialists.
Only Apply for What You Need
From a lenders perspective, there is naturally a greater degree of risk attached to lending someone $25,000 than there is to lending someone $5,000, if all other credit factors were equal.
While you may only need $5,000, you may also feel that it’d be great to have some extra cash left over to buy something else, treat yourself, or have a holiday.
However, depending on your credit score and credit history, the extra borrowing may be the difference between being accepted and being declined.
Only apply for a personal loan for the amount you need.
A large part of our eligibility criteria relies on the honesty of the potential applicant. Being dishonest or providing misinformation could damage a person’s chances of being successful when it comes to the credit checking stage.
We strongly recommend giving information that is accurate throughout the application process. If you are honest but you are not successful, we will be in a better position to help you sort your financial situation with a view to applying again in the future. It will also help you take the steps you need in order to be seen as a responsible borrower.
If you are dishonest in your application, this could then lead to your application being declined, which will ultimately hinder your chances of securing credit from us or other lenders in the future.
Get Accepted for Your Personal Loan
Before applying to [name] or another lender, be sure to have done everything you can to ensure that your chances of a successful application are as high as possible.
Disclaimer: This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs. Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.