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Improve Your Chances of Getting a Loan

If there’s something you’ve got your eye on you may be thinking of taking out a loan. Be it a boat, new car, caravan, motorbike, or even business equipment, they all fall into the category of small to medium sized loans.

Whether it’s your first loan or you’ve done it all before, applying for a loan can still be a daunting task. You never know how financial institutions are going to see you, your income, or the importance of what you want a loan for.

Fortunately there are a number of things you can do in the lead up and loan application process to make everything run as smoothly as possible and improve your chances of being approved.

Your financial habits

For small to medium sized loans financers will pay the most attention to the last three months of your financial records. While it’s always a good idea to budget and pay your bills on time, making sure you have at least three months of good financial records will help to show that you can pay back the loan amount. Good records include;

  • Regular, stable income
  • Bills paid on time
  • Consistent savings
  • Paying off credit card balances in full at the end of the month

The longer your records show all of this the better, but so long as you have three months of this kind of behaviour you should be in good standing.

Check your credit rating

If you have any doubt about your credit rating you can get a copy of your credit report. In some instances you can get this report for free but most of the time you will have to pay.

You are entitled to a free credit report if you have been declined credit in the last 90 days, however, being declined for credit actually lowers your credit score. So if there is any doubt you’re better off checking first, then following the above tips to improve your rating.

Know the loan

Do some research to see what loans are available and which ones would best suit you. It shows the financier that you are serious about the loan and you aren’t just out for some quick cash.

Detailed information

Make sure the information you provide is accurate. You may not be trying to hide anything, but when unexpected information shows up – such as a former address or name change – it can look like you're trying to hide a poor credit history attached to these details.

Make sure you have a clear list of your past addresses for the last three years, details of former employment and period working there, as well as name changes.

It’s even worth mentioning credit defaults if you have any. A credit check is going to reveal these details anyway and it’s better to hear it from you than wonder if there were any other things you didn’t bring up.

Still not sure? Please contact us to speak with our finance professionals.