Getting a personal loan is not easy, especially when you want a lender to approve it quickly due to short settlement time. But it is not difficult either. All you need is a little bit of discipline, research, and creativity and you are good to go. Following are some useful tips to make a lender approve your finance quickly:
Make Sure You Fulfill the Criteria
Whenever you apply for a loan, make sure you fulfil the criteria. For example, you should be
- At least 18 years of age
- A citizen of New Zealand or Australia or have an eligible visa or permanent residency in Australia
- Living in Australia
- Fulfilling minimum income criteria
- Having a good credit standing, and
- You have not gone bankrupt in the past
These are some of the key things you have to keep in mind when applying for a personal loan.
The Right Loan Value and the Documents Checklist
If you are applying for a personal loan, it would be best for a short period of time, to ensure you do not get stuck with the long-term debt applying for a personal loan. Talk to a financial expert or use a loan calculator to find out whether you have enough income to make the repayments or not.
You can also apply for lower loan value that fits well with your income and lifestyle. You can also choose to extend the loan terms in order to tone down the effect of loan repayments on your income.
Moreover, keep your documents up to date. Ask a lender to provide you with a complete document checklist so that there are no delays in terms of incomplete documentation. Different lenders have different documentation requirements. Therefore, ask every lender for their respective document checklist to avoid any stress, errors, or delays.
Get to Know the Value of Property
After submitting the application, hire a valuer to calculate the market value of a property. He or she will inspect the property on the basis of its location, size, and condition. After the inspection, the valuer will compare it with other houses in the same vicinity that were sold in the past 6 months. If there were fewer sales during that period, then it will be hard to identify the value.
Therefore, gather as much data as possible on recent sales in a similar suburb. This information will be helpful for a valuer to support their figure.
Maintain Good Credit History
It is very important to have a good credit rating if you wish to speed up the process of loan approval. Pay your bills on time and do not miss out any loan repayments as it can have an adverse effect on your credit rating. Moreover, submitting a loan application to different lenders may also have an impact on loan approval.
Therefore, be very careful to have a good credit standing and avoid sending applications to so many banks. Instead, carry out research and find the lenders that are offering suitable packages to fulfil your financial goals.
Review Your Credit Card and Mortgage Statement
Whenever you apply for a loan, make sure you fully understand the cost involved in the process. If you start adding up this cost, it may become a substantial amount. Therefore, consider the overall cost associated with the loan. It includes, but not limited to the stamp duty, transaction cost, premiums of the lender’s mortgage insurance, transfer fee, etc.
The best way to get a complete picture is to talk to your financial advisor as he or she will be able to provide you with a complete outline of the total cost of the loan. This will allow you to plan your goals accordingly.
Maximize your Borrowing Capacity
Most borrowers ask about their borrowing capacity when they apply for a loan. In the world of lenders, the term for how much you can borrow is called loan serviceability, which is based on various factors, such as:
- Monthly expenses of an applicant
- Monthly repayments of existing debt
- Rental income
- Overtime income or bonuses
- Whether the applicant is doing a full-time job or is he/she self-employed?
- The gross annual income
- Number of dependents an applicant has
- Whether a person is married or married
To improve your borrowing capacity, you can first pay off your short-term credit card loan fully or you can reduce the credit card limit. You can also increase the rental amount of investment property.
Keep these tips in mind whenever you apply for a loan. It will definitely reduce the overall time a lender takes to approve the loan.