Applying for a personal loan can be easy. The money can be used for things like; cars, certain bills, holidays, medical expenses, renovations, and more.
It is also possible to apply for a personal loan to replace your existing loan that is expensive or has a very high interest rate.
Where to apply for a personal loan?
There are many different companies or institutions offering personal loans. Some providers are good, whilst others can be problematic. It is usually worth discussing the personal loan with a professional financial adviser (such as us) to see what options might be available to you. A financial adviser or mortgage broker might be able to get a better deal for you compared to what is publically available online and through other channels.
Considerations with a personal loan
Will they accept customers with imperfect credit? If you’ve had some bad experiences or bad credit in the past, it may be hard to get a personal loan with certain providers. This might mean needing to use a finance company or receiving a higher interest rate, in exchange for the fact they will consider to approve loan.
Repayment frequency – Some people prefer to pay weekly, whilst others prefer monthly or fortnightly. Check what repayment frequencies the provider may be able to offer you.
Loan term – Being able to receive a longer loan term can usually be beneficial as it means that you can have more time to pay off the loan. A longer loan term usually means a lower $ amount for your weekly installment payments.
Is there an ability to repay the loan early without receiving additional charges? – check this with the provider and financial adviser (if applicable).
Security – Some personal loans will require security, such as that on a vehicle.
Ability to consolidate – There may be an ability to merge all your debts into one, and get a better deal.
You should consider there are also other considerations which cannot be completely covered off in this article.
Common documents required to apply for a personal loan
An application form needs to usually be completed. This type of form may be online or printed out. It would ask you questions about yourself, as well as your assets, liabilities, income and expenses.
It is common to be asked for identification. This can help the loan provider or finance company identify who you are. It also usually allows them to perform a credit check which is often required.
You are usually going to be asked for supporting documents. These can include matters such as bank statements, details of your other loans, and possibly payslips.
Expect that you might also be asked what the money will be used for. For example, if you’re planning to use the money to buy a car, you might need to show proof you are buying a car. Or if you’re using the money to pay for a holiday, you might need to be able to prove that you are using it to buy a holiday.
What to do once you have been approved?
Once you have been approved, a lender is likely to give you a letter or document of offer. This stipulates key information about the loan. You may also then be required to complete additional paperwork to satisfy any other affairs.
What happens if you get declined?
It isn’t uncommon to be declined. There are different reasons for a decline, but more often than not this is due to having an imperfect financial situation. You can try another provider with more lenient or flexible criteria. You could also try to budget and possibly seek the help of a budgeting advisor. If your finances need to get back on track, this might be something you need to conquer and work on before looking to apply for a personal loan again.
I’m interested! Where to apply?
You can talk to a financial adviser to discuss getting a personal loan.
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