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Need a personal loan? Find out how to easily get approved today.
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Getting approved can be easy when you know how (though some people might still find it easier than others). Making sure your credit score is solid, owning an asset to offer as security and paying off your existing debts are just some of the ways you can make your loan application easier. It's important to remember that loan rejections show up on your credit file. This can be red flag to lenders and decrease your chances of approval the next time you apply.
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How do I get approved for a personal loan?
There are a number of factors that lenders look at when determining whether or not someone is eligible for a personal loan. The following are the factors that lenders consider and how to improve your chances in each:
Credit history
Personal loan lenders will look at your credit score and history for any past defaults to determine how risky you will be as a borrower. Having a strong credit history with no defaults will make it easier to be approved for a loan. You can check your credit score for free and if you find it wanting, there are some steps you can take to improve it prior to submitting a loan application.
Income
Most lenders will usually have a minimum income requirement to determine whether someone will be able to repay the loan. This is a responsible lending technique. If your credit history isn't perfect but your income is reasonably high, you may still qualify for a personal loan (although you should probably discuss this with the lender directly prior to submitting an application). If your income doesn't meet the minimum requirement, that particular loan is probably not appropriate for your circumstances, as the repayments will likely be too high. Try applying for less, or considering a joint personal loan.
Loan security
Some loans require a loan security in the form of an asset or home equity. Other loans are unsecured and some make offering security optional. Sometimes offering an asset as security can increase your chances of approval on a certain loan - particularly if your credit history isn't perfect - as it presents less risk to the lender. Be sure that the asset offered as security meet the eligibility criteria set out by the lender. It will be required to have a value either equal to or more than the loan's value.
Loan purpose
What are you going to do with the funds you're applying for? Some loans come with restrictions as to what the funds can be used for. For example, secured car loans usually have restrictions on the age of the car. Other loans may prohibit using funds to pay bills or other debts. It's important to check the eligibility criteria of the loan and make sure that you can use it for what you need it for before applying.
False or incorrect details
Lenders verify the information and details that you put in your application. Therefore, if they find inconsistencies, they may reject you. Be vigilant and make sure that you always tell the truth.
Other debts
A lender will look into any other debts that you are currently holding. If there are too many, they may find cause to reject your application. If your need for a loan isn't pressing and you still have other outstanding debts, it might be worth taking the time to pay some of them off before applying for more finance. This will make it easier to get your application approved when you do make one. It will also make another loan easier on your finances.
3 steps to get a loan approved
Getting your personal loan approved should not be a hassle or a nightmare. Applicants can do the following to improve their chances:
- Compare a range of loans and lenders to find one that is affordable and that you meet the eligibility criteria for.
- Get all your supporting documents in order i.e bank statements, identification and anything else the institution requires.
- Complete your application, being as thorough as possible and providing as much information as requested.
Things to consider before applying for a personal loan
We've included some factors that you should consider when making your comparisons between different lenders before submitting an application:
What is the actual approval period?
With some loans, you can apply online and get approved instantly as long as you have a good credit rating and can provide proof of income. There are many lenders offering instant cash online within less than 24 hours. This allows you to access quick cash without having to wait for long periods before being approved. If you need a loan quickly, it might make more sense to go for a lender with a straightforward and quick approval period. Just make sure that you meet the eligibility criteria.
Is the loan secured or unsecured?
Depending on your preferences and availability of collateral, you can opt for an unsecured or a secured loan. With a secured easy approval loan you are required to pledge collateral against your loan as security in case you are unable to pay. Collateral could be a property deed, a guarantor or even the item you wish to use the money to finance. An unsecured loan does not require you to provide any security, but your credit rating has to be good due to the extra risk the lender takes on.
What are the interest rates associated with the loan?
Personal loan lenders usually personalise their rates depending on the financial circumstances and credit histories of the borrower. Factors such as asset ownership may also be taken into account. A lender's advertised rate is usually the lowest rate that that particular lender offers. Qualification for this rate may come with strict criteria and require an excellent credit score and high income. Shop around for a competitive rate and if your credit rating isn't perfect, perhaps take some steps to improve it before applying.
Things to consider when filling out an application
- Avoid multiple applications. Creditors will list applications on your credit file every time you apply for a loan. Too many applications in a short space of time can have a negative impact on your credit rating and act as a red flag to future potential lenders.
- Check your credit report. You should keep monitoring your credit file in order to ensure the information is up to date. You can take steps to remove outdated data, erroneous entries or other irrelevant information. Checking your credit file is free.
- Keep your credit record clean. If you have outstanding debts, make sure that you meet your repayments on time and don't default on any payments. Always keep track of your financials and don't take on any extra credit that you can't cope with comfortably.
Eligibility criteria
All loan applicants will be subject to the eligibility criteria set out by the individual lender. It is important to read this carefully prior to submitting an application in order to determine whether you are eligible. It is also important to consider the costs and decide whether you can afford the loan comfortably. Basic eligibility criteria for personal loans requires applicants to:
- Be above the age of 18
- Be an Australian citizen permanently residing in Australia
- Have a good credit rating
- Be able to provide proof of income
- Provide information of any assets owner (if any)
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Ask an Expert
Is it alright if I borrow ..
Hi Emma,
Thanks for your enquiry.
Please note that lenders have different eligibility criteria for personal loans, but ultimately they will assess your ability to service the loan with your income sources.
If you’d like to apply for one of the above personal loans, simply click ‘go to site’ and you’ll be redirected to the application page where you can complete the process online.
Thanks,
Belinda