Applying for a loan? Read these 5 tips first

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Personal Finance

Team MONEYME|17 March 2023| 3-minute read

Applying for a loan? Don’t rush in! 

If your application is rejected, you could do damage to your credit score—and it might be even tougher to get a loan down the track.  

Here are five steps to take before applying. 

1. How much do you need? 🤷🏽‍♀️ 

This might sound obvious. But, if you apply for more than you need, then get knocked back, this could look bad on your credit report. Plus, the size of your loan affects which type of loan you should apply for.  

So, work out how much you need as accurately as possible.  

2. What’s your credit score? ⁉️ 

Your credit score is a big predictor of whether a lender will approve your application. It’s a single number that indicates your history with credit, including how reliable you are with repayments and how many times you’ve applied for credit. The higher your credit score, the better.  

You can easily check your credit score in seconds in the MONEYME app without impacting your score. 

If your credit score is low, you might want to give it an upwards nudge before applying for a loan. Check out these 5 clever ways to give your credit score a leg up. Our tips and tricks include making repayments on time, increasing your credit card limit, and examining your report for mistakes. That’s right, credit reporters are human, too. 

3. Shop around 🛍 

Whatever you do, don’t jump on the first lender you see. Most loans come with hefty interest rates, so it’s important to nab the best deal you can find.  

Compare and contrast a variety of lenders, taking into consideration interest rates, fees, repayment schedules and the fine print. Not sure what to look for? This 3-minute read takes you through some key factors to consider when choosing a personal loan. 

Be sure to go beyond bricks and mortar banks. These days, there are stacks of out-of-the-box loan providers on the market, offering surprisingly good deals. Online lender MONEYME offers loans with fast approval, flexible repayment terms and no early repayment fees, making personal loans quick and hassle-free. 

4. Work out what your lender wants 😎 

Applying for a loan isn’t so different to applying for a job. The trick is working out what your lender wants.  

Make sure you understand the criteria, and ask if anything is unclear. Do you have to prove you’re earning a certain amount? Are temporary visas accepted? Is there a minimum credit score requirement? Is there a minimum age?  

Every lender is different, so don’t make assumptions. 

5. Make sure you’ll put your money where your mouth is 👄 

The last thing you want is to be burdened with a loan you can’t afford to repay unless you plan to live on bread and water for the next five years. Not even four weeks in the Greek Islands are worth that kind of sacrifice. 

Before you apply, work out how much the repayments will be and how often you’ll have to make them. Sometimes the lender will make this easier for you by providing this information before you hit ‘apply’ and they run a credit check on you. With MONEYME for example, you can check your personalised rate and repayments without affecting your credit score.  
 
Put together a budget, so you can see exactly what it will take to stay in control. We’ve put together a handy list of apps to help you keep track of your budget.

Green light? 🚦 

Once you’ve taken these five steps, you should be good to go. That business idea, holiday or car could be just on the horizon.