No doubt, loans are vital in our lives, and they are unavoidable in importance. From various sudden needs to the long-term financial requirements, loans can come in demand for any possible reason. No need to ask that you agree on this or not.
The actual concern arises on the part of uncertainties that, ask will you get the loan? However, the answer to this situation is available in your financial circumstances. After all, every single action taken on your loan application revolves around your finances.
From bank statements to pending debts, everything comes on the dissection table of the lenders. It is where; they look for the loopholes that may prove a threat to them at the time of loan repayments. Why not know about them in advance and avoid their occurrence as well as existence in your financial life? This way, you can have better chances of approval.
Loose Ends, HERE THEY ARE with due solutions
These reside in your credit records knowingly, unknowingly, or due to situations. It is better to know them in detail with remedies to improve your possibilities of getting funds. Isn’t it?
Credit score – Is it bad?? Oh, you may face some uncertainties
Talk about any financial product, loan, credit card, insurance, etc. and you cannot neglect credit score. It is your first introduction to the finance industry. It tells how good, bad or worst you are in your money management.
Poor credit rating is your first obstruction towards the attainment of funds. There can be multiple reasons for this, pending debts, various applications to many lenders, mention of wrong address in the electoral roll, etc.
The emergence of liberal online lending now makes it possible to borrow money despite low credit rating. However, this situation has never been a safe way to play the approval, rejection game.
Solution: It is better to keep a good credit score performance. Work on all the factors that may harm your payment record.
Missed repayments – Raises question on your repayment capacity
Missed payments always act as the monsters that eat every financial opportunity that you deserve to have a bright future. In reality, the cause behind this situation is your carelessness. However, sometimes circumstances too stand in the culprit list. Whatever is the reason, the ultimate truth is the failure in making timely repayments negatively affects the probability of getting a loan.
Solution: – Respect the time factor while paying the debts. Whether it is a small amount of personal loan or a large amount of £20000 loan or a credit card due, pay the obligations on time. Nothing else can compensate for the weakness of your finances on this part.
Imperfect income-outgoing ratio
You qualify for a loan based on your repayment capacity, which judged through the income-outgoing rate. This point denotes how much you earn and how much of it goes for the expenses. The two idol ratios are 60:40 and 70:30. Some lenders follow the previous one while some follow the latter one. If you are not able to touch any of these two, the rejection may happen.
Solution – Well, the rule is simple, reduce your expenses to bring the income – outgoing ratio to the perfect level. The other way is to increase your income. Show any additional source of income to compensate for the gap that occurs due to more number of expenses.
Very high-interest loans in the credit history
Qualifying for a loan improves your creditworthiness, but not every time it is applicable. Certain lending products are designed to serve last-minute financial needs. They facilitate funds in a few minutes, which is undoubtedly a great help for the borrowers. In exchange for this sudden transfer of funds, the lenders take a very high-interest rate.
Payday loans can be a perfect example of this concern. If someone took the funds despite a very high rate, it shows that he/she was in some serious financial condition, which means less control over personal finances. Otherwise, why did one go for such an expensive decision?
Solution – Avoid borrowing costly loans, and in case you have acquired in previous years, at least show a good income. Strong financial efficiency can turn the ‘NO’ into ‘Yes.’ Past always chases the present, but you can improve your today by adopting the right approach.
Conclusion
Leave behind all your spendthrift habits and careless deeds. When it comes to the desire for a better tomorrow, you need to act responsibly to remove all the flaws. However, here, one significant factor is the choice of the lender. Always try to approach the established lenders. Also, do not forget to compare. Maybe you are inclined to a renowned lender like First Finance, but it is also necessary to consider the other options too.
