Personal loans can be a great way to solve cash flow problems. They can help you consolidate your debt, pay bills or help you out of an unexpected financial bind. Here are our top tips for getting approved.
1. Know your credit status:
Before your apply for a loan make sure you check your credit report because there is no use applying for a loan unless you have a clean history. If there are any problems, deal with these and only then apply for a loan.
2. Have all the necessary information ready:
When you apply for a loan you will need to have all the relevant information ready, this will include: your ID number, physical and postal address, banking details, 3 months bank statements, salary slip and the amount that you want to apply for.
3. Don't apply for loans all over the place:
Never make the mistake of applying for loans all over the place, not only will this show on your credit report when lenders query your credit status, but lenders will see this as a problematic sign that you are applying for multiple loans.
4. Apply to borrow more than you need:
It might be worth applying for a little more than you need, because not only will you pay a lower interest rate on a bigger loan, but should you require a second loan down the line this may be refused as it would be seen as multiple loans.
5. Consider taking out income protection:
It will certainly be worth taking out income protection (from as little as R125 pm) , should anything happen that you cannot work or that you get retrenched at least you will still have income to service you loan and loan providers will also see this as a favourable application if your income is protected.
6. Consider taking out credit life cover:
For larger loans take out credit life insurance (costs are often under R100 pm) so that should anything happen to you, your loan be paid off and your family would not be burdened with the debt. Also be sure to tell lenders that you have credit life cover to cover the loan and this will ensure that your application is met favourably .
7. The best way to get approved is to reduce risk:
When lenders look to approve or decline a loan the single biggest factor they look at is risk exposure (i.e how likely are they to get paid). By making sure you have your finances in order and showing them that you are in control of your finical situation is the surest way to get your application approved.