Significant Factors That Affect Your Personal Loan Eligibility
Personal loans make up one of the most versatile loans in the portfolio of banks and financial institutions. True, one can take a personal loan for meeting the expenditure of a wedding, paying credit card debt, home renovation, spending on a holiday, a special car loan, and more. But securing loans is never guaranteed. Banks and financial institutions go through a number of factors before deciding to advance or not advance the loan to you. Let’s go through the factors that make banks decide. In fact, there is a range of factors that can impact your eligibility to secure a loan.
Factors That Affect Your Eligibility ForWedding Loans Australia
Your Credit History
If you have missed a repayment on your credit card it may impact your application for wedding loans in Australia. This is the situation since 2019 when the government introduced comprehensive credit reporting. According to this, banks and financial institutions need to share their customers’ loan repayment history with different credit bureaus. So, now, your bank can access your entire credit history. Missing a repayment for your credit card outstanding can really make your loan costs.
Income and Expenditure
The more you earn, the easier it is for you to repay your loans. While evaluating your application for wedding loans in Australia, the bank would certainly take your income into consideration. However, they will not look at it in isolation. They will also take into account your expenditure. They can go through expenses like insurances, internet bills, electricity and gas bills, etc which you can rarely avoid. Nevertheless, some banks also take into account if you are spending excessive amounts on clothing or takeaway, and enhance the lending interest rate.
Saving money for future use is necessary. Such savings may be of help when you plan to make a big purchase such as a car or when you plan your wedding or a home renovation or a holiday. Banks look at savings as a way to ensure that you have an optional source of finance to fall back upon in case there is some disturbance in your regular source of income.
Debt is a very important factor for banks to evaluate their capability to borrow. If you have multiple concurrent debts such as car loans, personal loans, credit card loans, etc, banks may evaluate you as a risky borrower.
So, if you’re considering making an application for a personal loan, you mayneed to pay down your debt as much as possible. You may also consolidate all your debt and pay a fraction of it.