Whether it’s a short term or long term loan, it all begins with an application. If you want to give yourself the best chance of a successful loan application, there are some things you need to know about what influences being approved or not. Because a successful loan application isn’t only about securing a loan – there are interest rates and repayment terms that come into play as well.
Before you begin your loan application, you want to make sure that you have everything in order. This blog post has tips about how to improve your chances of a successful loan application.
Improve Your Chances of Getting a Loan With Honesty
Don’t provide misleading information on your application. Stay away from overestimating your income and underestimating any expenses you currently have as this could lead to your loan application being rejected. Instead, just be honest and state your income and expenses accurately so you don’t get declined.
Check your credit score
Your credit score is an indication of your credit behaviour and how likely you are to pay back your debt. Your credit score will impact whether your loan application is successful or not, and what your repayment terms and interest will be. Check your credit score before making a loan application so that you can make the necessary changes, if required. You can check your credit score for free with our partner, ClearScore, to see what bills or debt you need to pay before making your next loan application.
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Loan Approval, Can Your Afford it?
You don’t want to take out a loan if you can’t afford to repay it. This won’t benefit you and it won’t look good in the eyes of lenders. So make sure that the loan you are looking to apply for is what you need and can afford to repay. This means ensuring that you have a steady income stream that can show your payment history as well as your ability to repay the monthly instalments. FASTA, for example, requires all applications to have verifiable income for the last 90 days and a minimum stated income of R6000 per month. This is to ensure responsible lending and to provide you with a loan that will not cause any financial stress to you.
Apply For A Loan, How it Works
Depending on whether you are applying for a short term or long term loan, the requirements needed to start and complete your loan application will vary. You need to understand what those requirements are, how long your loan application will take and when you will receive a response regarding the outcome. With FASTA, our online application process gives you an outcome and, if you are approved, funding in minutes, with the following requirements for a loan application:
- A valid South African ID number
- Be between 19 and 65 years old
- Have access to internet banking
- Verifiable income for the last 90 days
Odds of Getting Approved
If you do get rejected for a loan application, take some time before you apply for another loan. Too many applications, or ‘hard enquiries’, within a short period of time can have a negative impact on your credit score, decreasing your chances of a successful loan application next time. While there is no limit to the number of loan applications you can make, it is best to only apply for a loan when you need it, or wait at least 30 days before making your next loan application.
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