Whether you’ve been through the rigmarole of loan rejections or you’re preparing an application for the first time, the process of securing a personal loan can certainly be stressful. Naturally, you want to make sure the effort and time put in comes to fruition in order to alleviate some of the financial burden you’re currently experiencing.
To help aid your application and improve your chances of approval, there are some small things you can do to. Take these tips with you when preparing your application for bad credit personal loans in Melbourne.
If you’ve already been rejected, understand why this was the case
We all learn from our mistakes. If you’ve previously submitted unsuccessful applications for a personal loan, take the time to find out why – for example, do you have overdue payments of 60 days or more on your credit report? Do you have enough savings to prove you can pay off the loan?
While bad credit personal loans are certainly called such for a reason, lenders still have the responsibility of making sure you can actually afford the loan before guaranteeing you approval.
Check your credit report
In Australia, credit reporting bodies can provide free access to consumer credit reports once every 12 months. However, free access is also granted if a client has been refused credit within the past 90 days, or if personal information has been corrected. To request a copy of your credit report, contact Equifax, Experian or illion: these are the three credit reporting bodies operating in Australia.
By thoroughly checking your credit report, you can make sure any wrong listings are identified and subsequently fixed by the credit reporter, thus rectifying an inaccurately low credit score.
Consider consolidating and refinance debts
If you’re currently paying off more than one loan, it can often be a good idea to roll everything into one so as to make it easier to manage your existing repayments. On the flipside, doing so can also result in higher interests rates and fees, which you obviously want to avoid.
Be sure to do your research and compare interest rates beforehand. If debt reconsolidation works out to be more affordable, then it’s certainly a viable option to consider in order to boost that bad credit history.
Draw up a budget
Naturally, the more you can grow your savings, the easier it will be to apply for any kind of loan. To help rub out any black mark against your credit report, try creating a budget for yourself. Put down on paper what you’re spending and whether there are areas to bolster your savings – it could be as simple as cutting out your daily takeaway coffee, contemplating other modes of transport (such as cycling instead of driving to work), or cancelling an unused gym membership.
Even if you have a bad credit history, being able to prove that your income, expenses and savings are healthy enough to make repayments on a personal loan can greatly improve your likelihood of receiving approval on your application.