If you find yourself in a situation where you are in need to accommodate your basic daily living expenses, fund your big day or to take a much needed vacation, you may be considering taking out a quick personal loan.
In simple terms, a personal loan is the one where you are not required to put any of your possessions down for collateral where the lender can repossess these items if you fail to make payments. As the lenders of personal loans have no guarantee of the repayment of the loan other than your character or reputation, unsecured personal loans incur higher interest rate than collateralised loans.
Before applying for a personal loan, there are a few things that you can do to improve your chances of getting approved for a personal loan.
Tips for Getting Your Personal Loan Approved
Here are our best tips to improve your chances of approval and to help you to qualify for improved terms.
Determine the type of personal loan you require.
Personal loans are often referred to as unsecured, closed-end installment loans, however, technically auto loans, mortgages and even credit cards are all considered as personal loans rather than being considered as business loans. It is important that you fully understand what type of loan you are applying for.
Review your credit score.
You should aim to avoid applying for loans that you already know that you do not qualify for in the hope that it may be approved. Each time that you apply for a loan, it is then reported on your credit report and thus your credit score will suffer from a small blow.
Should your application be rejected, the damage that this can cause to your credit report can be significant. This is because you may be required to report any rejected applications in any of your future attempts to obtain credit or a loan. This may make your next lender significantly more cautious and hesitant to offer you a loan with optimal interest rates when examining your credit application.
You should request to receive your credit report at least once every year from a reputable credit reporting agency to ensure that all the information is correct and that there are no false or incorrect statements on it.
Once you have gathered all of this information, you should ask your lender of the guidelines that they are required to follow in order to assess applications prior to your application so you can ensure that you have met all of the necessary criteria to the best of your ability.
Boost your credit score.
It is important to note that your credit score is not necessarily set in stone. There are steps that you can take to improve your overall credit score before applying for a personal loan – this is especially important if your current credit score is close to the next classification category.
- Credit Score 760+ = Excellent Credit Rating
- Credit Score 700+ = Good Credit Rating
- Credit Score 640+ = Fair Credit
If your current credit score is 760, placing it in the Excellent Credit Rating category, increasing your credit to 770 will not be of much help in loan applications. However, if your credit score is 690, improving your credit score to above 700 can significantly improve the likelihood of an approved loan application, and can even save you a great deal of money should you qualify for lower interest rates.
Luckily, there are a few things that you can do to improve your credit score. One course of action can be by ensuring that you are consistently paying your bills on time and are actively working to reduce your debt – available credit ratio.
Should you have recently acquired a late payment, or another item that may have a negative effect on your credit history, it may be beneficial to wait for 6 months and ensure that you do not make any other late payments as this can improve your chances of gaining approval faster, with a lower interest rate.
Only consider reputable lenders.
Doing your research and doing some shopping online when looking for a quick personal loan is wise. By selecting the right lender you can save a lot of time and money that would otherwise be wasted running around between traditional lenders.
It is also important to note that online lenders often have much lower operating costs which means that you may benefit from the generally lower interest rates that they have to offer.
It is essential that when you are conducting this research, you are extremely wary as there are often a plethora of questionable lenders that will guarantee a loan approval however they are nothing more than loan scammers. Ensure that your chosen online lender is licensed and assess their previous customer reviews to see how they are rated.
Be aware of your Debt-to-Income Ratio.
When applying for a personal loan, apply for as little money as possible, only apply for a loan that you are sure you can pay back and ensure that you do not under or over-report your income.
In saying this, it is essential that you do not, under any circumstances, inflate your income or lie about your income, or any other detail for that matter, on your loan application.
Many people will fall into the trap of getting too creative with their income, especially if the lender does not require any documents that prove your income level. Should you be found to be lying about your income, you could be faced with criminal charges and the law tends to be relatively unforgiving especially if you are unable to make the necessary payments on a loan where you have been less than honest in your application.
The LoanOne Difference
LoanOne personal loans are one of the safest and fastest ways in Australia to secure a personal loan. Whether you need the money to put down a payment on your new car, you have run into a family emergency or you simply need the money to stay on top of your daily living expenses, LoanOne personal loans are your fast, hassle-free and secure way to getting your hands on some quick money.
With LoanOne, you can apply for personal loan amounts from $2,100 to $8,000 with 12 month terms and the best part is that the application process won’t take you longer than 5 minutes.
With LoanOne, get fast, simple and safe loans!
Fill in our 5 minute online application today!