30 Nov Your Free Personal Loan Checklist: Everything You Need For A Loan
If you’ve got unexpected expenses to cover, like emergency vehicle repairs, travel costs or urgent renovations, then a personal loan could be a good way of arranging quick finance. Here’s your personal loan checklist with everything you need to know
Before you approach a lender, it’s a good idea to go through this personal loan checklist which will help to improve your chances of making a successful application.
Are you eligible?
Find out if you meet your chosen lender’s eligibility criteria. Often they will require you to be over 18 years of age and an Australian resident. They might also have minimum income requirements or exclusions for people who have been registered as bankrupt. Knowing a lender’s criteria before you apply will save you the time and effort of filing an application that doesn’t meet them.
How’s your credit? Personal Loan Checklist
Not every lender will turn you away if your credit history is bad. Many offer services to borrowers who have negative credit reports, although you may be charged a higher interest rate than someone who has a clean borrowing history. Whether you have bad credit or not, it’s a great idea to request a free copy of your credit report before you apply for finance. It’s not uncommon for credit reports to contain errors, so make sure that there aren’t any black marks on there that don’t belong to you before you apply for new finance. If you find something on there that you don’t think is yours, contact the company concerned to ask them to rectify it.
How much do you need to borrow?
Do your homework before you apply for a loan and make sure you know exactly how much money you should borrow. If you’re getting a loan to repair your vehicle or do renovations, get a fixed quote from your mechanic or builder first. Avoid asking for more money than you need. The larger the loan, the more it costs to pay back, and if it’s less affordable there is a greater chance that your application could be declined.
Can you afford it?
Lenders are prohibited by Australian law from approving finance that isn’t suitable for you, so if they believe you won’t be able to meet the repayments for a loan, they must decline it. Therefore, it’s a good idea to work out in advance what your likely repayments would be, and whether you have enough money in your weekly budget to cover them. ASIC’s personal loan calculator offers you a quick and easy way to calculate how much a loan will cost you.
What about stability?
Take a moment to assess your personal situation. Is your income regular and predictable, and can you rely on it to remain that way for the near future? How long have you been at your current address? A stable employment and residential history helps lenders look on your application more favourably, so if you’ve changed both frequently in the last two years, be aware that this could affect your chances of having a loan approved.
Making several loan applications close together can have a negative effect on your credit report, so use this checklist to avoid making unrealistic applications and to help you choose the lender that most closely matches your needs.