Tips that could help you get approved for a personal loan
Whether you’re looking to consolidate your debt, kick off home improvements or plan your fairy-tale wedding, a personal loan could help you achieve your dreams sooner and these 4 tips could help improve your chances of getting approved for the personal loan you desire.
1. Make sure you meet the eligibility criteria
While every lender has different eligibility criteria for each type of loan they offer and their own credit assessment process, here are some of the basic requirements you’ll have to meet in order to qualify for a personal loan.
- You are 18 years or older
- You have a regular source of income and you meet the minimum income requirements
- You are an Australian citizen, permanent resident of Australia or you hold an eligible visa
- You can provide documents of your financial situation
2. Improve your credit score
Most banks and P2P lenders utilise credit scores and credit file information as part of their credit assessment process. To show your lender that you’re a responsible borrower, start by making all your current repayments on time and in full, as late payments can hurt your score, limit the number of credit enquiries and ensure your credit report is accurate and up-to-date.
Haven’t checked your credit score yet? Sign up to Credit Savvy to get your credit score and credit file information for free today!
3. Get your finances in shape
Review your spending habits and make the necessary changes to your lifestyle to show the lender that you are spending within your means. If you have any outstanding debts, try and make extra repayments to reduce the amount of debt against your name, as a high debt-to-income ratio could be marked as a red flag that you might struggle to make your repayments.
Lenders also like to see that you’re saving regularly, so set a budget plan to save a set amount of money every week or month to demonstrate that you are likely to be able to manage regular loan repayments.
Here are a few articles to help get your finances back on track:
- Essential apps to track your spending, save money and pay your friends
- 4 tips to help you pay your bills on time
- What you should know about managing debt
- Top tips to clear your plastic debt
4. Apply only for what you need
Personal loans are meant to help you out in the short term, not leave you with long-term debt. Applying for a high loan amount that you don’t need could be the difference between being accepted and being declined for the loan, so make sure you carefully work out the amount you need based on your circumstances.
Need to crunch some numbers? Check out our personal loan calculator to work out your repayments and the interest rate you could afford on top of your outgoing expenses.
Remember, before signing a credit contract, always read the entire document carefully and check all the details and fine print so you are not caught out by unforeseen costs.
Ready to start comparing personal loans? Here are a few to get you started!
Want to learn more about personal loans? Head over to the Learning Hub and get started today.
~Comparison rate is calculated as indicated. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different fees, terms, or a different loan amount might result in a different comparison rate.
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