Improving your Odds of Securing a Personal Loan

Here are six tips that should help you to improve your odds of being accepted for a personal loan:

1) Apply for a loan from the bank that you have your current/check account with. Banks typically use different credit scorecards for existing and new customers. Existing customers are much more likely to get an AIP (Approval In Principle)

2) Maintain a healthy balance on your current/check account for several months before applying. Applicants who haven’t exceeded their overdraft limit and who haven’t incurred charges, within the last 3 – 6 months, are much more likely to be accepted for a loan.

3) Be truthful on the application form. If you try to manipulate the details, the chances are that you will be found out and your application declined (either at the application stage or thereafter when supporting documents are being verified).

4) Make sure you enter your address exactly as it appears on the Voters Roll. A lot of applications fail not because the applicant isn’t credit worthy, but because the applicant’s address couldn’t be verified.

5) Visit a branch. If you apply online, the loans decisioning process will be entirely automated. If you apply via a branch, the initial approval process will also be automated. However, if you are declined, the branch staff may be able to request that the decision be overridden, if there is a valid reason for them to do so. They may also be able to offer advice about the amount to request and the repayment term.

6) Consider a secured loan. If you fear that you will be rejected for a loan, but have tangible assets, you may be able to arrange a secured loan. e.g. the loan is granted on the basis that if you default on payments, the bank will be able to sell your asset to recoup their costs.

Another thing to consider is your credit report. If you are declined for a loan, it may be because there is something adverse showing on your credit report. Check to see if it’s erroneous, and (if so) get it removed. One thing to bear in mind is that you will be scored against your address. Sometimes, particularly with flat shares, a decline may be because other people who share (or once shared) your address have a bad credit history!

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