When it comes to matters touching on loans, there is always no such thing as a guaranteed loan approval system. That, however, does not mean that you cannot work out how to increase your odds and chances of getting your application approved. You simply need to work out how you can meet the lender’s minimum approval requirements then avoid falling into these traps. At least work out how you can solve these traps as they are usually at the helm of why most loan applications get rejected.
1. What About A Bad Credit History?
All credit is usually pooled into one data called credit history. A bad credit history does not necessarily come about when you default in paying your loans. Your credit report can also be damaged when you make late loan payments or make too many loan requests within a short period. It is always wise to stay on top of your credit history and ensure that all the details in there are accurate and accounted for. In case you find any errors in the information, then you need to report the issue to the relevant credit bureau to correct it pronto.
2. Lack Of A reliable Source Of Income
Lenders will also look keenly into your monthly income and use it to determine whether you qualify for a loan or not, and the amount that can be allocated to you if you qualify. Lenders will always check whether you have a steady income flow. Enough to be able to pay back the loan without fail. Nobody will be willing to dish out their money if they have no assurance of it being dished back, right? This is exactly how lenders think too. So, to improve your chances of having your Northcash application approved, you can also include several copies of your salary slips which should prove that your income is consistent and that you are not a risky investment to the lender.
3. Having An Ugly Financial History
Most lenders will also be interested in your financial history and record. If you have ever filed for bankruptcy before, if you have any litigation cases or any outstanding summons against you before or presently. Past loan rejections are always also captured and recorded in your credit history. So, before you make your loan application, ensure that all the details of your financial background check out and are correct.
4. What Kind of Financial Commitments Do You Have?
If you already have other considerable amounts of financial commitment like car loans, credit cards, student loans, personal loans, etc. Then other lenders will be less likely inclined to offer you a loan. And if they do so, then they may choose to reduce the loan margin significantly. Remember, all your monthly commitments are recorded in your credit history. So, if you have a higher debt service ratio, then the chances of getting your application approved will be very slim.
5. Your Repayment Trends On Credit
From your credit history, other lenders are able to access your records and check how your debt repayments are. And if they are not so forthcoming, then you may be looking at an application rejection. Even staying too long without paying a small amount will be recorded and lenders will not consider you to be a favorable investment. So, ensure you make all your repayments on time and the right amount to avoid this inconvenience.
6. Necessary & Correct Documentation
It is funny how people always try to dupe banks into getting loans by submitting fraudulent information. This never works and will never work period. Tampering with your salary slips and other financial details only give the lenders more reason to reject your application and stay clear of you. Your details may even be blacklisted and there is no way of repairing this.
7. What Is The Value Of The Asset Being Offered As Collateral?
Many lenders have varied restrictions on the types of assets that you can declare as collateral for secured loans. So, if the assets you present do not meet the lender’s minimum requirements, then your loan could also be rejected.