5 things a lender checks when you submit a personal loan application 

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Personal Finance

Team MONEYME|09 November 2023| 2 minute read

Applying for a personal loan can be exciting but nerve wracking. How do you know what your lender is looking for?  

Plus, you want to avoid getting rejected. A knock-back could affect not only your plans, but also your credit score.  

It’s smart to get into your lender’s mind before submitting. Here are five things a lender usually looks for.  

Your income versus your expenses 🥊 

Your lender wants to feel confident you can make repayments. So, they’ll want to see how your income tracks against your expenses. 

Before submitting your application, review your budget to ensure you’re living within your means and have enough to keep on top of your debt.   

Not sure? Spend some time getting yourself into a better financial position before applying.  

What you’re like with spending 🤑 

Do you have a habit of splurging every time a clothing sale or cheap holiday comes up? That’s fine – if you stay within your budget (and your budget includes loan repayments).  

But, if you blow your budget frequently, so that there’s not enough left over for repayments, then your lender might be hesitant to approve your application.  

Chances are, you’ll be asked to demonstrate your spending habits by providing documentation, such as bank statements.  

At MONEYME, we’ll take a look at your last 3 months of bank statements by asking for secure view-only access to your account (using bank-grade security), so you won’t need to worry about downloading and uploading your statements. 

Whether or not (and how) you’re employed 👷🏻‍♀️ 

It’s not so much the nature of your job that matters, but your employment status.  

In other words, do you work full-time or part-time? Are you employed permanently or casually? The more secure and substantial your employment, the better.  

If you work casually, lenders generally like to see that you’ve been at your current job for longer than if you’re employed on a part-time or full-time basis.  

A little number with a lot of power: your credit score 🔋 

Your credit score might be just a single number, but it tells a lender a lot about your history with borrowing money.  

It’s based on your credit report, which is a record – both positive and negative – of your debts and utility bills. Timely payments help boost your credit score, while overdue payments tend to lower it.  

Not happy with your credit score? Don’t despair. You can improve it over time with these tips.  

See your score now with MONEYME’s free credit score tool. It takes just a few minutes. 

What you own versus what you owe 🏡 

A lender will usually survey all your assets and all your liabilities (such as current loans and credit cards).  

That way, they’ll know about any other repayments you’re making. Plus, they’ll find out if you have anything to fall back on, should you experience financial troubles before your loan is fully repaid. 

Getting your application right 😎 

Before submitting your personal loan application, work through the checklist above to make sure your ducks are all in a row.  

If they’re not, or you’re unsure, then it’s probably a good idea to make some changes – till you’re confident you’ll be able to make your repayments comfortably.