If you are thinking of borrowing money, there is a bit of homework that you should consider doing first so as to make sure your application goes ahead smoothly. You have to assess your affordability and consider all of your personal circumstances before you even begin to think about looking for loan providers and wondering whether you would be eligible for a loan.
Personal Circumstances
There is a lot to consider and a lot to reflect on. If you are planning to take out a loan, you have to make sure that you have the means to sustain the payments over perhaps a number of years and you must be confident that you will be able to do that, so the first step may be to consider whether your job is steady and secure or if it is not, are you simply hoping that something will come along to tide you over afterward or do you have plans?
What about your living circumstances, are you planning any big moves which may impact on your ability to maintain your payments? These are all questions that you need to ask yourself in order to determine your longer-term affordability. Then you will need to sit with a piece of paper or a spreadsheet and detail all of your regular income and all of your outgoings.
Outgoings are not just money that you would spend on your essentials like gas and electricity, they have to include pleasurable activities and travel too. So, remember to factor in any holidays that you have, whether they are already organised or not!
Type of Loan
You may also wish to consider the type of loan that you require. Are you purchasing an asset like a car or a house, in which case you will require a secured loan or are you prepared to offer an asset of your own as security for your loan? This type of borrowing allows you to access what is known as a secured loan.
If you are not offering any form of security for your loan, you would be applying for an unsecured loan. Clearly, a secured loan gives a lender that bit more peace of mind and as such, the interest rates on offer may be that bit more favourable.
Once you have taken your circumstances into account, you may wish to look at getting yourself ‘loan ready’. Most loan companies operate in a fairly similar way in that they will require certain information from you and they will expect that you fulfill certain criteria before they will be prepared to lend, so it is important that you prepare for that ahead of time.
QuickLoans is a company which operates for the residents of New Zealand, you can have a look here https://www.quickloans.co.nz/ They offer secured loans at some of the best rates that are available in New Zealand, let’s look at how to qualify for their loans and if you are in another country, there is a good chance that you will have to satisfy very similar criteria.
Application
You will first of all be asked to complete an application and in the case of QuickLoans, this application is online and takes only a few minutes of your time to complete. You will be asked for personal information such as name, address, date of birth and all of your contact details.
Once the application process is complete, you will be asked to produce some documentation.
Residency / Identification
You will have to prove that you are a New Zealand resident in order to be eligible for a QuickLoan. If you are not a resident and have a guarantor who is, that may be enough to satisfy the requirements. Documents such as a government-issued ID card, passport, driving license would all be suitable.
Proof of Address
You will require to have a stable address and you may be asked for prior residencies. You should be able to produce an agreement from your landlord if you are renting, or utility bills which are in your name, etc.
Affordability
You will be asked to demonstrate affordability and that would involve giving proof of income. If you are employed, it would simply be a case of producing recent payslips or if you are self-employed you may have to check specific requirements and agree on what would be suitable. You may also be asked for bank statements and for some lenders they may use this as a demonstration that you will be able to make the payments.
You may very well have an excellent salary but if you are overdrawn on your account every month, then it is perhaps an indication to the lender that you are living beyond your budget and therefore would not be a good risk for them to lend money. It may be that your working account is overdrawn but you have other accounts with savings etc, it would be a good idea to include those too. It is sensible however if you are applying for a loan, to keep all of your finances in order and accounts in credit to avoid any misunderstandings.
Keep credit card bills to a minimum during the application process and before as if it is clear that you are living from month to month on credit, that could also indicate that you are living beyond your means and it could be a red flag for the lender.
Security
If you are applying to QuickLoans for one of their secured loans, they will require details of the security that you are planning to use, so if it is your car, for example, they would need the registration of the vehicle being used.
Credit Check
Any lender will require access to your credit file and they will assess, from the information obtained, whether they will be able to lend to you. They are essentially assessing how much of a risk you would pose to them.
There is a lot that you can do here to prepare ahead, the following describes your credit file, what it is and why it is important.
Residents of a country develop a credit history within that country and all of the information is filed. You could think of your credit history as a detailed report on all of your financial transactions, a financial CV in other words. So, if you have had any borrowing, that will be logged on your file, if you have had any problems with your borrowing, that is also logged, details of credit cards will also be included as will your address and previous addresses.
What people sometimes do not realise is that the person with whom they are financially linked is also mentioned in their report, so it could be someone with whom you share a bank account, or have any financial borrowing with, their status can also affect yours as you are financially linked to them.
Hard check
Every time that you apply for credit, a check is made on your file and this check, known as a ‘hard check’ leaves what is known as a footprint on your file. It pays not to apply too many times as if lenders see too many hard checks, they may assume that you already have too much in the way of credit and may be reluctant to lend to you.
It is your responsibility to keep your credit file up to date and to check to make sure that there are no anomalies. It can happen from time to time that incorrect information is lodged on file. If you check your own credit file, this is known as a ‘soft check’ and this will not leave a footprint.
A credit agency will collate all of your information, assess it and then attach a number to it. This is what is known as your ‘credit score’. Different credit agencies will use a different scoring system and you should be aware that there is more than one agency in operation.
Video – What is My Credit Score?
You need to know fast
QuickLoans understand that customers often need to know very quickly whether they are going to be approved for a loan and as such, they offer a very speedy turnaround. If you are applying elsewhere, it would be worth asking the provider what their turnaround time is, especially if you are looking to have the funds quickly.
Finding out early affords you the opportunity to try somewhere else if you are turned down, but if you have to apply elsewhere, make sure that you understand why you were turned down in the first place and if you can rectify the situation, do so before making application to another lender as the outcome may just turn out to be the same.
With QuickLoans, you have 14 days to accept the funds which give you a bit of flexibility if you do not require to have them in your account straight away.
QuickLoans will try to accommodate as many customers as they can and are prepared to offer some flexibility but there are certain criteria that they can’t overlook.
So, if you are making an application for any form of credit, make sure that you are ‘credit ready’ so that you do not have any problems with your application. A reputable lender will be able to help you with the process and all of the requirements. QuickLoans are open during normal business hours and have an experienced staff complement who are only too willing to support you through the application process.