Dear Customers & Prospective Customers,
In this post today, we want to address the topic on everyone’s mind this week: The Covid-19 Novel Coronavirus.
We are now officially in a state of global pandemic.
The effects of the Coronavirus outbreak — and the measures the New Zealand Government has taken to slow it — reach into every facet of our country’s businesses and communities.
That means the financial markets — and specifically the lending business ecosystem — will be affected by this.
So, allow us to clarify a couple of things.
Firstly…
We are still accepting, processing and settling finance applications across our range of products and services.
As with all Kiwi businesses, we remain vigilant for the wellbeing of our staff and their families.
But at the time of writing, we’re all hands on deck.
Should this change, and mean we are unable to serve our customers at our normal capacity, we will let you know.
Like the rest of the country and world, we are of course monitoring the situation daily and standing by to adhere to Ministry of Health directives.
We will do our best to remain fully operational.
And…
We’ve always prided ourselves in going above and beyond for our customers here at Finance Today.
While there are obviously huge and rapidly changing factors at play right now, we remain focused on matching our customers with the best possible financial solutions from our network of lenders across the country.
The basic conditions we must use to assess loan applications remain the same.
We will always ask for proof of income.
We will never lend to a customer who can’t afford to repay their loan.
Our commitment to responsible lending in line with regulatory requirements and industry standards remains the same, regardless of how severe and prolonged the Coronavirus outbreak becomes.
Should you have any queries regarding the current lending conditions and options available, please feel free to get in touch.
Look after yourself, and each other.
Sincerely,
The Finance Today Team
Posted in Business Loans, Car Finance, Debt Consolidation, Mortgages, Personal Finance
Some people will tell you there’s nothing wrong with being in debt.
Others will say debt is bad and you should do everything in your power to stay out of it, not matter what.
It’s the same as when people say ‘money doesn’t buy happiness’.
They’re right…
But try being truly happy without money in the modern world, and you’ll probably arrive at a different conclusion.
The truth about debt is probably somewhere in the middle.
Most New Zealanders wouldn’t own a home, for example, if they weren’t in debt with a mortgage.
Others wouldn’t own their car.
So let’s weigh up what type of debt is ‘good’, and ‘bad’.
The Good.
Good debt, in a nutshell, is a loan that will help you improve and strengthen your financial position over the long term.
Consider the phrase ‘it takes money to make money’.
If you’re borrowing money to study, you could consider that good debt because it will increase your ability to earn money once you get the qualification.
If you’re borrowing money to build a business, that too can be considered good debt, since you might be investing in new equipment or staff to expand your operation.
The same goes for buying a home or any other asset that could add financial value to your situation.
The Bad.
Bad debt comes in two forms.
The first is when you borrow money to buy something that doesn’t add any substantial value to your life.
Like a shopping spree or a week-long bender in Bali that you can’t afford.
The second is when you borrow money at a rate that means your repayments have a significant negative impact on your weekly budget.
High interest credit cards and payday loans fall into this category.
A payday loan could cost you three times what you get when you borrow it.
That is textbook bad debt.
The Sensible.
The reality is when many of us decide to take a look at our finances and make some changes, we’re already in debt, maybe through no fault of our own.
And while on the face of it, borrowing more money would seem like a bad idea…
One exception is debt consolidation.
Debt consolidation is when you take one new loan to pay off all your existing loans in one hit.
The new loan clears your old debts, and you pay it back at a lower interest rate than what you were paying before.
This accelerates how quickly you get out of debt and — ideally — lower your repayments to improve your weekly budget.
Posted in Business Loans, Personal Finance
We’re talking to so many customers lately who are using our service to improve their situation, we just can’t resist sharing another of their stories with you today.
Jim (not his real name) is a transport operator from Northland.
For years, he’s worked on his business, expanding his fleet and building his client list with contract work.
As with many business owners who have bootstrapped their way to success, Jim hit a point where he needed to borrow some money in order to take it to the next level.
He found a property in Northland that was perfect for a new base for his business.
So he approached the bank for a loan, and, predictably enough…
The Bank Didn’t Want To Loan Jim A Cent
The piece of land Jim had found was only $70,000.
The bank didn’t like it. They said it was too remote to justify lending him money to buy — they also didn’t like the look of Jim’s broader financial position.
As we’ve seen with a number of self-employed customers we work with, Jim had multiple finance arrangements with a few different companies.
This contributed to the bank turning him down for the cash he needed to keep building his business.
But rather than accept defeat, Jim came to Finance Today to see how we might be able to help.
We Helped Jim Consolidate His Existing Debt And Secure The New Property For His Business
We took a close look at Jim’s complete financial position.
The result?
We assessed and approved a loan for $200,000 so that he could clear his existing mortgage debt…
Acquire the new block of land…
And crush his interest rate down so that he’s now making lower repayments on the money he’s borrowed than before we approved a loan for him.
In other words:
Finance Today Handed Jim A Financial Win-Win
This, for us, is the perfect outcome for a customer.
While Jim has had to borrow more money to do what he wants to do, he’s actually in a stronger financial position week-to-week thanks to the solution we put together for him.
And he’s one of hundreds of customers we’ve proudly gone above and beyond for when no other finance company wanted to deal with them.
If you have any questions about obtaining fast, fair finance, we’re always happy to help.
Posted in Business Loans, Debt Consolidation, Personal Finance
If you’re applying for a loan in New Zealand, it might feel easy to get overwhelmed.
There are a lot of options to consider and different numbers you need to understand.
But rather than just going for the first loan you come across, we encourage you to do a little research before you settle on the loan that’s best for you.
Here’s a quick three-point checklist to refer to when you’re looking for your next loan.
From Bank To ‘Pay Day’ Loans: Understand The Range Of Options
The first thing you’ll learn when you start searching for a loan, is there’s a wide variety of options out there.
Don’t let this overwhelm you — it’s a good thing to have a lot of options.
Many people go to their bank first. This is the traditional place to start.
Banks can give you a good deal. But they can also be slow and inflexible compared to other types of lenders.
Then you have credit unions and peer-to-peer lending options.
And at the other end of the spectrum you have pay day lenders, who aim to give customers quick cash loans at high interest rates.
Your personal financial situation will largely determine which type of lender you wish to deal with.
Finance Today is a broker that works with New Zealand’s leading lenders and matches customers with the best option for them.
Get an instant estimate of how much we could help you borrow.
Choose A Finance Company That Prides Itself On Excellent Customer Service
You might be paying back your loan for several years after you settle on a provider.
So it pays to choose a company that has a great customer service ethic and delivers friendly, professional service.
There’s nothing worse than being bounced around a call center by customer service reps who don’t seem to care whether they help you or not!
So whoever you select to borrow money with, be sure they treat you as a valued customer, that you can contact them easily and that they provide a professional service.
Make Sure Your Loan Provider Or Broker Has A Proven Track Record
This especially goes for small lenders and pay day lenders.
Never borrow money from someone who can’t prove they deliver great results for their customers.
Make sure they clearly state their terms and conditions — and their fees.
And, if possible, choose a finance provider who can substantiate their reputation with verified customer reviews!
We get a lot of people coming to us applying for loans, convinced that they have a bad credit rating.
However, many of these people don’t actually know the truth about their credit rating — or their rights when it comes to checking and correcting it.
So before you go assuming you have a bad credit rating — and therefore need to settle for something like a payday loan when better options may be available to you…
Read this post!
What exactly is your credit rating?
Your ‘credit rating’ is your entire history of financial decisions.
Every time you apply for a loan, a mobile or internet plan, mortgage or credit card, for example, the provider has to check whether or not your history demonstrates you will be able to afford the repayments.
Every time you apply for a financial product or service, the details of that application enter your credit report.
However, your credit rating is only as good as the information New Zealand’s ratings agencies receive about your financial behavior.
You have the power to fix any mistakes in your credit rating
Unfortunately, sometimes the reality is that credit ratings agencies record incorrect information about you.
For example, if you bought a car that the previous owner owed money on, and that debt became your debt (on paper), this could dramatically change your credit rating.
The good news is that you have the right to make corrections to your credit rating — and it is easy to do so.
You can request your own credit report at any time and make corrections via the reporting agency you deal with.
It makes sense to ensure your credit rating is accurate and not carrying any incorrect financial information about you BEFORE you apply for a loan.
Don’t just assume you have bad credit
Jumping to conclusions about your credit rating before knowing the facts could lead you to accept a less-than-ideal loan.
Checking your credit rating — and making corrections to it — is both free and easy.
We encourage you to do so before applying for any loan, because your credit rating impacts:
If you have any questions don’t hesitate to get in touch with us.
Along with all the amazing customers we deal with week to week here at Finance Today, we always receive more than our fair share of hate mail.
So today, we thought we’d take a little time to address a few of the recent accusations that have popped up on our social media pages.
There’s clearly a lot of Kiwis out there who don’t understand the realities of personal finance and debt consolidation… or who believe anyone who lends money is automatically a “loan shark” who’s out to get you.
The truth about Loan Place is a lot simpler and a less scary than that.
So let’s look at a few recent accusations we’ve seen.
Accusation: It’s A Scam
Truth: Hundreds Of Happy Customers Prove That’s Not The Case
As you’ll see in our post about responsible lending, we actually turn down a LOT more finance applications than we approve.
Why?
Because our mission is to help everyday people get finance solutions that will improve their financial position.
For most applicants, getting a loan is not the best option.
Naturally, some people get angry when we turn them down for a loan.
There are literally hundreds of Finance Today customers who’ve come to us for personal loans, car loans, business loans and debt consolidation…
…and who have been thoroughly impressed by our service and the solution we helped them find.
In other words, our growing community of happy, loyal Finance Today customers is living proof our business is not a scam.
Accusation: ‘Mature People’ Don’t Consolidate Debt
Truth: Consolidating Debt Is Often The First Step To Repairing Your Financial Position
One comment we saw recently concerned our debt consolidation service.
The gist was this: Taking one loan to pay off another loan doesn’t make sense.
Now, that might be true, IF you took a new loan to pay another at the same — or higher — interest rate.
But if you have multiple loans and the average interest rate across those loans is, for example, 25%…
Then you would be in a much better position if you took a debt consolidation loan and dropped the interest rate to, say, 19%.
It’s simple maths.
We wouldn’t offer debt consolidation to our customers if it didn’t help them improve their financial situation.
Accusation: ‘Be Careful Of The Broker Fee’
Truth: Our Consultants Work Tirelessly To Find Great Finance Solutions, Tailored Specifically To Our Customers
One way to think of Finance Today is like an air travel aggregator website for finance.
We don’t lend money ourselves. We broker finance agreements on behalf of our customers using our working relationships with multiple lenders across the country.
We do charge a modest broker fee to provide this service. We have never and will never hide this simple fact of our business model.
While some people online seem to think we are ‘working for third parties’, the truth is we are working for our customers.
Our consultants work one-on-one with each of our customers to match their specific situation and goals to the right loan from the right lender.
We are proud to provide this service to everyday Kiwis.
If you have any questions about our business or the services we provide, don’t hesitate to get in touch with us
This week on the Finance Today blog, we’re pulling back the curtain on three real-life success stories.
When people apply for a loan with us, no matter whether it’s a small loan or finance for a major purchase, our aim is always the same:
We want to help our customers improve their long-term financial situation by access fast, fair finance solutions that suit their specific needs and background.
And we’re pleased to be able to share with you today three stories of customers we’ve proudly served in the past few months.
These are everyday Kiwis who found us online, applied for a loan and worked with one of our dedicated consultants to find a solution that would allow them to borrow the right amount of money under the right conditions.
See for yourself!
(We’ve changed their names to protect their privacy.)
From Out of Business to Making $40,000 a Month
Rob is a business owner who unfortunately had to deal with the failure and closure of his business.
Not long after though, he got the opportunity to become an ‘owner driver’ for a container transport freight company.
The only hitch was that he had to find $140,000 to buy his own truck and trailer before he could get started.
How could Rob possibly go from dealing with a collapsed business to finding that much money to start work with the new firm?
He called us.
We quickly analyzed Rob’s situation and income potential, and helped him obtain a loan for the new truck.
Rob only had to provide a small deposit and use the truck as security on the loan.
He’s now up and running with his new small business, generating $40,000 a month in revenue.
Mortgage Cleared and Property Project Complete!
Damian had been building a house in Queenstown over the past couple of years but had gone over budget (as building projects often do) and found himself $100,000 away from finishing.
Because he was self-employed, the banks required two years’ worth of financial statements in order to lend Damian the funds he needed to complete his new building.
Luckily for him, Damian found Finance Today.
We were able to help him arrange a $780,000 mortgage refinance that cleared the existing mortgage and advanced him the funds to finish the project.
Today, the building is complete and Damian recently rented it to his first tenants.
A $50,000 Loan Facility Approved in Just 2 Hours
Janet runs a food truck company. Business had been going well, so she was looking to expand her fleet and buy a late model Isuzu to help serve more customers.
She started looking around for a lender to help her finance the new truck.
Unfortunately, Janet had difficulty proving a stable income and found that most lenders deemed her to be a high risk customers (she already had multiple trucks on finance).
But when she spoke with us, we dove a little deeper into her situation.
As a property owner who’d be running a successful business for 10 years, Janet was not the high risk our competitors told her she was.
In just two hours, we had approved a $50,000 loan for Janet’s new truck.
Her business is now growing even more successful and she’s thinking about working with us again to finance another truck!
There you have it.
These are just three of the hundreds of success stories we’ve shared with everyday Kiwis here at Finance Today.
If you have any questions about obtaining fast, fair finance, we’re happy to help.
One of the things some like to claim is that you are better off going to the bank for a loan than applying with us.
We thought it would be helpful for those considering applying for finance with Loanplace to get the facts straight first.
We’re a New Zealand Government Registered Financial Services Provider.
We have thousands of satisfied customers who’ve borrowed amounts from just a few thousand dollars up to several thousands, for reasons ranging from debt consolidation and home improvements to buying a new car or going on a much-needed holiday.
If you don’t want to take our word for it (we are, of course, biased), then read some of our hundreds of independently verified reviews.
We’re Agile: We Can Quickly Approve Loans Large And Small
The biggest advantage we have over the banks is that we are an impartial business that has strong working relationships with multiple finance companies in New Zealand.
That means we can match your application with the best lender based on your individual situation.
A bank, on the other hand, is only interested in lending you money itself — even if there’s a better option out there.
One of the best things about being a small, independent business is we can offer our customers great flexibility — often more so than the banks.
While applying for a loan through a major bank can require large amounts of paperwork, we pride ourselves on offering customers a quick, user-friendly online application that only requires you prove your income using our secure online portal.
Another advantage we offer our clients is our lightning-quick response and approval times.
If you apply for finance with a bank, you can sometimes expect to wait days for a result.
At Loanplace, our quick-and-easy online application process means we can process, approve and settle your loan within just two hours (that’s best-case scenario, of course — some applications are more complex and we rely on our customers providing their information quickly in order to deliver a fast service).
So while we are small and independent, we are not looking to scam anybody — just deliver fast, fair service.
We’re 100% Legit (And Fully Capable Of Beating The Banks’ Interest Rates)
Loanplace is a New Zealand Government Registered Financial Services Provider.
We’re in business to help everyday kiwis get access to fast, fair finance with friendly, one-on-one service.
We deliver our service via our website and our hand-picked team of consultants here at our office in Christchurch.
We’re also fully committed to responsible lending. Because we believe in only lending money to those who can afford to pay it back, plain and simple.
Our team assesses each loan application fair and square.
The interest rate we offer our customers is always directly in line with the information they provide in their application and their credit history.
While the banks tend not to offer interest rates on loans lower than 13.95%, we’re able to beat that by about 5%.
If you have a particular question you’d like to ask us, we’d love to help!
Chances are in the past couple of months you’ve seen or heard some rather scary stories about so-called ‘pay day lenders’.
TV news and social media ran stories in June about how the Commerce Commission is taking one business to the High Court of New Zealand over allegations of irresponsible lending.
Naturally, the story has caused everyday Kiwis to pay attention to this business, and others like it.
If the story worries you…
Or makes you second guess whether it’s smart or safe to borrow money in New Zealand right now…
Good.
Because here at Loanplace we think the more educated and aware you are about borrowing money, the better.
The better it is for you, for businesses lending money… for the whole industry.
So, in this brief post, we’re going to address a few important points.
The point isn’t to sell you anything (though of course our business is providing fair finance to everyday Kiwis — more on that here).
Our objective here is to explain what’s going on with the Commerce Commission’s case… and show why the kind of lending practices they are aiming to crack down on are, in fact, bad for everybody in the finance industry.
‘Finance Company’ Does Not Equal ‘Pay Day Lender’
547.5%.
That’s the interest rate some people have been agreeing to when they’ve taken on what’s known as a ‘pay day loan’.
If someone is in the position where they need to borrow money at an interest rate that high… how can they reasonably be expected to repay more than SIX TIMES that much money?
It’s pretty basic.
If you find a lender offering money at an interest rate like that, you must understand the repayment demands.
For now, this sort of thing isn’t illegal. That’s probably going to change very soon.
But in the meantime, we advise you not to accept any loans at interest rates that could make your financial situation worse, not better.
(Loanplace doesn’t ever approve a loan with an interest rate higher than 25%.)
Why We’re HAPPY There Are People Complaining About Us Online…
If you look around our social media pages, you’ll find people commenting that Loanplace is “a scam” and complaining that we’re discriminating against people by not lending money to those who don’t have enough income or assets.
This is criticism we’re happy to have.
Here’s why.
Loanplace exists to provide fair finance to everyday Kiwis with friendly, fast and personal service.
We aren’t here to arrange finance for people who can’t afford it…
Whose financial situation means a loan would actually hurt rather than help them…
Or to force those who don’t understand the rules of borrowing money to pay back four, five or six times the amount they borrowed.
In other words…
We feel it’s far better to have people complaining that we won’t approve their finance application that to have customers who can’t afford to make the repayments on their loan.
If A Loan Is Bad For You, It’s Ultimately Bad For The Business You Borrow From
A high interest loan that takes you years to repay and potentially damages your credit rating is, obviously, not the most sensible option.
But it’s not just bad for you if you can’t afford to pay it back.
It’s actually bad — over the long term — for the business who lends you the money.
Think about it.
If a business approves loans for 100 customers and only, say, 10 of those customers actually manage to repay it, then the business is in trouble.
This is why you find companies like those the Commerce Commission is targeting charging massive interest rates — they’re trying to cover their costs and protect themselves from customers failing to pay their loans back.
To us, that’s a pretty bad business model.
Not just because it puts customers in financial difficulty.
But because it creates uncertainty and unsustainable conditions for the business.
Our model is different.
We only approve loans for customers who understand their repayment obligations and have a reasonable chance of paying back their loan without entering significant financial hardship.
Our team of professional finance consultants don’t approve loans for everyone (see the complaints on our Facebook page).
In fact, we’re so serious about providing fair service to our customers and creating a sustainable business that we’ve invested in creating proprietary software that allows our team to accurately determine whether it’s sensible to offer a loan to a customer.
We also specialize in debt consolidation.
This involves looking at our customers’ existing loans and repackaging them into one debt at a lower interest rate.
In other words, we believe that what’s in our customers’ interests is in our interest (and that insanely high interest rates are not good for you OR us in the long term).
So, if you’ve seen the stories about the Commerce Commission’s case against ‘pay day’ lending in New Zealand…
And that’s made you think carefully about the rules and realities of borrowing money…
Great!
We encourage all our customers to familiarize themselves with the conditions under which they borrow money from any third party.
For more information, please check out this article about Responsible Lending: https://www.consumer.org.nz/articles/responsible-lending
Sources:
https://www.tvnz.co.nz/one-news/new-zealand/moolas-alleged-interest-rate-breaches-shows-system-not-working-like-should-finance-expert
https://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=12247594
Often in life you can find yourself in a bit of a pickle when it comes to money. Maybe some unexpected bills came up that you were not prepared for. Perhaps you needed to buy a car to get to work. Whatever the reason, it happens, and there are a few things you can do to help get yourself into a better situation fast!
If you have multiple debts, say a credit card, a hire purchase and an overdraft, it is important to pay these off in the correct order so that you can get out of debt fast and save the most money.
So the first thing to do is find out what the interest rates are on each of your debts. Often credit cards or payday loans are going to be the one with the highest rate.
Now you have figured out the highest rate debt, you need to pay off as much as you can each month rather than just the minimum payment. The reason for this, is everyday interest is calculated on your debt, so the lower the amount of debt on each day, the less interest you will be charged.
In the long run, this means you end up paying the debt off faster and also it costs you less because you are paying less interest.
Did you know that different credit card providers offer an interest free period when you transfer the balance of a credit card from another bank to them?
Often the big banks have a 6 month or even a 12 month interest free period when you transfer the balance. That means on a credit card debt of $5000 at an interest rate of 19.95% you would save nearly $500 over a 6 month interest free period.
Now of course this only helps you if once you transfer the balance, you pay off as much as you can each month. Don’t just pay the minimum amount. This is to drop the balance as much as possible while in the interest free period.
If you get to the end of the interest free period and still owe money, nothing is stopping you from doing another balance transfer to a different bank to take advantage of another interest free period.
Another option is to get a ‘Debt Consolidation’ loan, which brings all your debts together into a single, easy to manage repayment.
Often this winds up to be the most manageable solution for someone with many debts, as it makes the monthly repayment much smaller and can often be at a lower average interest rate.
When it comes to personal finance there are a lot of different approaches and ideas out there and often it can be hard to tell what is good advice and what isn’t.
Below are 5 of the most common myths around personal finance.
Often people confuse these two concepts as being the same thing. Surely people who earn a lot of money are wealthy right? Well that’s not always the case.
Many people earn more than enough money to become wealthy they simply do not hold on to the money they earn and end up spending it on various unnecessary things.
Likewise even on a low income, if most of the money is saved or invested that person can find themselves with a very healthy bank account.
There is a fantastic article on this very myth here.
You might have been warned about credit cards in the past by friends or family. They usually tell you some horror story about a person getting into mountains of debt at a high interest rate.
Now that scenario can definitely come true but with some financial discipline you can make credit cards work in your favour.
First of all, having a credit card and paying it off in full every month, not only incurs zero interest for you, but also helps you build up a healthy credit history that can help you with getting finance in the future like a car loan or a mortgage.
A second use of credit cards that not many people are aware of are their ability to earn you rewards points. Certain credit cards come with a rewards points scheme such as a frequent flyer program or flybuys.
How this works, is every dollar you spend on the credit card usually translates into 1 reward point.
So one strategy you might use is if you purchase everything on your credit card that you would’ve usually purchased on your eftpos card you will now be getting rewards points which build up very fast.
But wait, won’t that cost me interest!? If you pay off your credit card in full every month, you do not get charged any interest at all. That means as long as you stay disciplined, you will be earning rewards points absolutely free!
Often people say, that because they have a low income, there is no point in saving money. This couldn’t be further from the truth!
Even saving $20 a week would leave you with just over $1000 at the end of the year. Imagine how many presents you could afford with an extra $1000 at Christmas time.
Saving money, like anything else, is a habit. Once you get in the habit of putting money aside every week, it quickly snowballs and you end up building quite a healthy savings account.
A good strategy can be to put aside a certain percentage, say 10% of your pay into a savings account then as you earn more money, you maintain the same percentage. So if you earn $500 a week now, that’d be $50 into savings.
It’s never to late to start saving money and the sooner you do, the more wealth you will create.
This myth has been hanging around for many generations. It stems back to when the housing market was in very different shape and it often was the case that buying a home was a good investment.
In reality, people do not factor in all the additional costs to home ownership such as interest payments, repair costs, legal fees, rates and insurances, the list goes on.
Renting on the other hand, puts all that responsibility on the land lord and the person renting the house simply has to worry about paying the rent.
If you don’t like the house or the area anymore, you can simply up and move in a relatively short time frame. Selling a house can take a minimum of 30 days up to many months, if you can’t find a buyer.
Your monthly rent is also often much cheaper than the monthly mortgage payment for the same house. This allows you to use that saved money to put into better investments.
Only wealthy people invest in stocks or own investment properties right? Wrong.
Anyone can invest their money and you can start with a relatively small amount too. Often the first and best place to start, is investing in a whole market instead of a single stock.
This allows you to spread your risk and over the long term, usually beats a savings account interest rate. This can be done by purchasing shares in an ETF (Exchange Traded Funds), there is a fantastic guide here on ETF’s.
Like saving money, investing is a habit. As you form your good savings habit, you can easily move into investing as well.
Watching your money grow overtime is very exciting and even if you are only growing $100 you will still get great satisfaction out of watching it grow bigger!
Getting your first loan can be an exciting time, whether you are getting it for your first car, a holiday or even to consolidate some debt.
But this time can also be a cause of stress if you are not prepared for what is involved in applying for a loan.
The main thing you need to do before applying for a loan is checking if you meet the criteria. Every lender has different criteria, so it is important to understand this before you send in an application.
Usually you would have to meet the below:
Now of course some of these criteria can be by-passed in certain situations. For example, if you do not have an appropriate weekly income, sometimes a co-borrower can be used to meet the criteria instead. But more on that later.
The amount of money you want to borrow is another big factor on whether or not a lender will give you the money. Personal loans are supposed to help you out in the short term but not harm you in the long run.
If you wanted to borrow $50,000 but only earn $200 a week as a part time employee, the lender would not approve the loan as you would unlikely not be able to afford to pay it back.
A quick rule of thumb here is once you have calculated the repayments per month, if you still have at least $900 left over after all your expenses (food, rent, power etc), the lender will likely approve your loan.
You may have heard before that you need a good credit history in order to apply for a loan, but what is a good credit history and how do I get one?
An easy way to build up a credit history is to have a monthly utility bill in your name that you always pay on time. For instance you might have a phone bill for your mobile phone that you pay every month.
This shows to a potential lender, that you are reliable at paying money that you owe and gives them more confidence in lending you the money that you want to borrow.
Is no credit history a good thing? Unfortunately it doesn’t help you get a loan as now a potential lender has no way of seeing if you have been reliable at paying bills in the past.
So if you currently do not have a credit history, that is something you will need to start working on.
When you apply for a loan, most times a lender will want to see your last 3 months of bank statements. This is so they can see your spending habits and your general approach to finance.
In order to help them see your good money habits, make sure you have your salary always put into the same account so it can easily be seen you are getting paid the amount you say you are.
Make sure you do not overdraw your account, this way you show you have good budgeting skills and know how to manage your finances well. This will give a lender even more confidence in your application.
Have a savings account and show a good history of putting money aside into this account. This shows your budgeting skills and that you are able to plan ahead.
If you think you have all the above covered, you are ready to apply for a loan. Here at Finance Today we have an expert team that can help you get the finance you want at a fantastic rate.
