Thinking about a personal loan to consolidate your debts, pay for upgrades to your home, or even finance a luxurious trip?
If yes, this short blog article is for you! In it, we’ll detail the things you need to know before applying for a personal loan so that it gets approved and you get your much-needed cash.
Read on to find out more!
1. Make sure your financial records are accurate
If this is your first personal loan, one thing to keep in mind is you need financial information to get approved. Your income, savings, credit score and other financial history are needed when you get a loan.
A record of saving money gives us assurance that you’re likely to repay any debt you take on. Your savings, no matter how small, is an excellent indicator that you are financially responsible. It also shows that you can budget your money and can meet the monthly payments.
2. Build a good credit history
A good credit history is important in a loan application as it gives us confidence that you’ll pay back your loan on time, so make sure to check your credit record before applying for a loan.
There are some easy ways to ensure you have a good credit score. One is to make sure you pay your bills or credit cards on time. Missed or late payments stay on record for two years. A one-time delayed payment is not a big deal, but when you get into the habit of paying late, this becomes a problem.
All credit cards or store cards you applied to also show up on your credit report. Applying for a lot of credit in a short period of time can raise red flags so think twice before getting a new credit card every month.
3. Meet the eligibility requirements
Know what loan requirements are so you can prepare them even before you apply for a personal loan.
For a personal loan with us, you need to be:
- At least 18 years old
- Hold a New Zealand citizenship or a resident
- Meet the income requirements
4. Apply for a reasonable amount
When you apply for a personal loan, borrow only an amount you can pay for a short time. Our repayments calculator can give you an idea of how much to borrow.
How much you should loan depends on your income. Applying for a realistic amount increases your chance of getting your personal loan approved.
5. Longer terms mean more interest
The amount of money you borrow affects the amount of interest you pay, of course. Most don’t realize, though, that the time it takes to pay off the loan also affects how much interest you’ll pay.
Yes, your monthly payments will be lower if you take out a long-term personal loan, but the overall interest you’ll pay will be far higher. A short-term loan will have higher monthly payments, but you’ll have paid much less in interest when it’s paid off.
If you want to talk to us about applying for a loan please call Quick Loans on 0800 200 275 or simply apply online.
This is not legal advice.