Tips that could help you get approved for a personal loan

Last updated: 27 July 2020

Whether you’re looking to consolidate your debt, kick off home improvements, buy your dream car, 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.

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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:

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.

Want to learn more about personal loans? Head over to the Learning Hub and get started today.

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