Applying for a personal loan may be a tedious task and in order to apply for one, you will have to invest quite a lot of time to visit banks and to talk to bankers. Nevertheless, applying for a personal loan is not as difficult as what you may think. Check on the tips below to increase the chances to get your personal loan approved.
Check Your Financial Records
Make sure you determine where you are financially prior to applying for a personal loan. As like almost everything in life, a clean and good record is always better than a bad record. When you apply for a personal loan, the first thing that the particular bank will pay attention to is your credit record. If they find that you have a history of bad habits like missing your repayments, frequently making late payments and so on, the chances to get your personal loan rejected will be a lot higher. Therefore, having a strong financial record will swing the favour to your direction when you apply for personal loans in banks. If your current financial record is bad, improve on it first before you try to apply for a personal loan. Although CCRIS report is not a definite factor to get your personal loan application approved or rejected, the particular bank will still take a look at your CCRIS report before making the final decision. That bank may also refer to your CTOS report as an added precaution.
Before you try to apply for a personal loan, make sure that you improve your credit record by making your repayments on time for a minimum period of 6 months or longer. The bank can see your 6 months historical repayment record from your credit report to determine if you are paying on time or making late payments. If they find that you are constantly making late repayments or even missing out on them, chances is that the bank will not approved your personal loan application due to your poor repayment habits. Even though when you are not applying for a personal loan, you should always make your repayments on time to keep a good credit record.
Read the Fine Print
In general, banks will usually offer a personal loan amount of between 2 to 3 times of your monthly gross income hence it is important to calculate your monthly income and other financial commitments first to determine if you have affordability to take up a personal loan. In some cases, people failed to read some of the fine print details like the amount of minimum monthly gross income needed. Therefore, check if you are eligible first rather than to raise your hopes and then get disappointed when the personal loan application gets rejected due to insufficient monthly gross income.
Create a Credit History
Similar to having a bad credit history, banks are also reluctant to offer personal loans to individuals that has no credit history. A person that has no credit history is someone who has never owned a credit card, apply for mortgage loan or a hire purchase loan. The bank will then have insufficient information to analyse if that person is a good paymaster or not. Hence, it is advisable to have some kind of financial commitment first before you start to apply for a personal loan with a particular bank. With regards to getting some financial commitments, I am not asking you to do extreme things such as purchasing a house or a car immediately. Instead, you can start with something on a smaller scale like applying for a credit card that you can use for cashback purposes and to earn reward points while at the same time, build a good credit history by making your monthly repayments on time.
In conclusion, the other tip is to put yourself in the shoes of the particular bank that you are applying your personal loan with. In this way, you are able to evaluate yourself in a better way before you try your luck in applying for a personal loan. Different banks may have different risk tolerance and appetite but the tips that I mentioned above are the general guidelines to increase the chances of getting your personal loan application approved.