There are ways to improve the chances of your loan getting approved. In fact, getting a personal loan with bad credit is possible too now. You might find the need for a personal loan for multiple reasons: home repairs, going for holidays, planning and paying for a wedding, or even debt consolidation.
So, here are a number of tips to help you improve the chances of getting approval for your personal loan:
1. Meet the Criteria
Regardless of the personal loan you apply for, you are required to fulfil some basic requirements that include:
- Minimum 18 years of age.
- Either must have Australian or New Zealand citizenship or an Australian permanent residency; else, a valid visa is required.
- Must be residing in Australia.
- Must fulfil the minimum requirements of income.
- Must have a regular source of income or be employed.
- Must possess a good credit rating.
- Must not be bankrupt.
2. Apply for an Optimum Amount
The core purpose of personal loans is to offer short-term monetary assistance. Personal loans are not supposed to leave you under a pile of long-term debt. Your income should be sufficient to support the repayments of the loan you have applied for. Loans are approved only when your income has the capability to repay the loan amount.
So, if you face trouble with approval for the loan, you should reconsider the loan amount or even extend the term to make the burden of repayments easier on your cash flow.
3. Maintain a Good Account History
Effectively managing your finances will help show that you’re ready to take on a personal loan. And, if you have a salary account and you’re paying your bills and putting some savings aside, it’s a good demonstration that you know how to budget and manage your money.
It’s also essential not to overdraw your account. This will help you avoid fees and create a good account history as it shows you can manage your current finances effectively.
4. Maintain a Good Credit Rating
You must ensure bills of basic regular necessities like phone, water, and electricity are paid on time. This significantly contributes to a good credit rating. Meanwhile, if you miss any of their payments, it can adversely impact your personal credit rating. If you miss repaying your debt to any credit reporting bodies either, it can also have an impact on your credit rating.
There are many credit reporting bodies to check your credit score quickly. As such, applying for personal loans with multiple lenders can also affect the possibility of getting approval. However, getting a personal loan with bad credit is possible too now, although it has its own terms and conditions.
5. Maintain a Good Savings Record
Regularly contributing to savings helps prove you to be financially responsible. If you can save a fixed sum of money every week or every month, it can help establish that you can manage your loan repayments.
Applying for a personal loan has become very easy and fuss-free and can be done online. The process and the time for receiving approval have also significantly speeded up. Meanwhile, if your loan gets rejected, you should find out why that happened. You should then take the proper measures to reapply for a personal loan.