How to Improve Your Loan Application Success

How to Improve Your Loan Application Success

Ready to take the plunge with a loan but worried about your chances of being approved?

With so many hoops to jump through and boxes to tick, how can you make sure you’re doing it right?

Our experts are here to assure you it’s far more achievable than you may realise. We’ve pulled together some basic steps to help improve your loan application success.

Curb Your Spending With A Budget

Depending on the lender you go with, most will want to assess your last three-to-six months’ worth of spending. This doesn’t mean you need to be saving every dollar that lands in your account. However, if you’re guilty of the spontaneous buy-now-pay-later purchase, or frequent dining out trips, these could become costly when it comes to meeting with lenders.

We recommend sitting down at least six-months out from submitting your loan application to lay down a strong budget. Cutting back on discretionary spending habits such as retail, entertainment and dining purchases could vastly improve your chances of having your loan approved.

Prove Your Ability To Repay

At the core of all this financial scrutiny, lenders simply want to see that you’re capable of repaying the loan they offer you. It’s in your best interest to make this as evident as possible to them.

A strong credit history is a good place to start. Having a proven track record of timely repayments with no defaults is a much better look than those missed payments and late fees. If you don’t have a credit card, or have never had a loan in the past, this isn’t the time to be rushing out to get one in order to obtain a credit rating.

Simply paying your bills and rent on time, having a steady pattern of saving, and not frequently using Afterpay or Zipay can act as great evidence of your ability to repay your loan.

Reduce and Consolidate Your Debts

Conversely, having a bunch of debt to your name is one of the best ways to deter a lender. Before applying for a loan, try and minimise your existing debt where possible. Not only will this make you a more attractive candidate when it comes to obtaining a loan, but it will ease the financial burden of trying to cover multiple repayments at once.

If you have a couple of small debts outstanding, it could be useful to consolidate them into one single debt. This goes for both credit cards and personal loans. Look for options with a lower interest rate to save you some precious dollars in the long run.

Shop Around To Find The Lender That Works For You

Similar to any other purchase – do you research and shop around for the option that’s right for you. While all lenders work on a similar basis to approve loans, their exact criteria may differ. Plus, their loan schemes, refinancing options, interest rates and fee structures can differ from lender to lender.

If you’re feeling a little lost, our loan comparison platform can help you calculate, compare and save on the perfect loan for your needs. Get in touch today to find out we can help, or jump online and get started