The need for some extra funds to dip into every now and then is a common scenario for most folks. There may be outstanding debts you need to pay off, a couple of repairs or simply, a much-needed vacation. Personal loans are among the most convenient resources to rely on in these situations.
Finance institutions such as Alex Bank offer much-needed personal loans to ordinary people on fair interest rates and terms. The online application process is highly convenient, ensuring you have the necessary funds in a reasonable amount of time.
Drafting a personal loan application might seem like a challenging task, especially if this is your first time applying for one. But it is not necessarily a highly complicated process.
You will find the following vital points helpful in making your application a hassle-free task.
Table of contents
Consider the amount of money you need
The first step is to determine how much money you need. It is advisable to borrow only as much as you need and not anything extra. This is because borrowing more than you can repay is bound to push you further into debt.
A minimum of $2000 and a maximum of $30,000 is generally accepted. So, it is wise to apply for an amount within this bracket. The idea is to ensure that you can comfortably pay back the amount every month for over a stipulated period without causing you financial strain.
Check your financial history carefully
Take the time out to check all your past and current financial statements with extreme caution. Examine all your income receipts, credit history, and other details. This way, if you find anything amiss, you have plenty of time to rectify the situation.
You can also contact the financial institution or bank to inquire about any extra paperwork they may need. An added advantage of this exercise is that you will already have all the necessary documents in hand, even before applying for the loan.
Ensure you qualify for the loan
Checking eligibility criteria and ensuring you meet all of them will save you valuable time. It will also help increase the chances of your loan being processed successfully.
To be eligible for a personal loan, you need to be at least eighteen years old, an Australian citizen or permanent resident, and receive income regularly. You should also not have faced bankruptcy.
You will need authorised documents to prove all of the criteria mentioned above. For instance, you will need to submit proof of income, assets, photo identification, address proof, savings, statements of debts (if any), etc.
Financial transparency keeps companies afloat and helps them prosper. And the same applies to banks and other financial institutions. But being honest is of utmost importance on the part of the applicant too, and not just the banks.
You must be truthful about why you need the amount you are applying for, give them access to your financial records, and assure them of repayment.
Financial institutions encounter a considerable number of people who wish to borrow amounts that they cannot repay. So, being honest will help both sides get through the application process much faster and easier.
Find a reliable lender
Applying for a loan with a reliable and reputed lender is critically important. So, look for banks or other financial institutions that offer steady interest rates, flexible repayment options, and do not hide charges.
Also, try opting for lenders that do not charge recurring fees (unless you happen to miss a payment) or a fee for early payouts. Ideally, an online, paperless transaction is the best option as it cuts down on a lot of additional work, such as repeated physical visits to submit extra paperwork.
Furthermore, it is prudent to pick a bank with high-end security encryption to protect your personal data and sensitive financial information.
All this can help you get the money quickly, save you unnecessary charges, and help you establish an easy rapport with the bank. This will come in handy in future loan applications since the bank authorities already know that you repay loans without delay or default.
Compare term length and interest rates
Financial institutions and banks charge an interest rate on the amount of money you borrow from them. Payable every month, the interest rate depends on the term or length of your loan repayment.
Before you finalise an amount and the term length, check a couple of different options.
For example, consider the amount of interest you will have to pay for a loan of $5000 and if that is affordable for you. Similarly, check a few other amounts and their respective interest rates, finally zeroing in on one that best suits your needs.
The trick is to borrow an amount with an interest rate that does not add to the burden of your monthly expenses.
Read the fine print
Every loan provider will issue a document (or documents) to applicants as part of the application process. You should read this document carefully before going ahead with the personal loan application. That’s because sometimes, there may be hidden charges imprinted on them that may escape your notice, especially if you skim through the content.
Since this document is legally binding, ensure that you are comfortable with all the terms and conditions it mentions. If you do not understand something, immediately contact the lender for clarification. This will help you avoid any discrepancies in the future.
Reputed lending institutions like Alex Bank usually don’t hide details in the fine print, and make sure you are well informed of all the terms and conditions in the loan agreement.
The bottom line
Often, personal loans are an excellent alternative to dipping into your savings for an immediate need. They can help you pay for a medical procedure, upgrade your kitchen or furnish the entire house, and even travel to exciting new places.
You can do all this and deal with other financial emergencies with ease using the loan amount, provided you can repay it with ease.
If you are worried about meeting eligibility requirements, you can first inquire how much you can borrow and repay comfortably. You make this inquiry with more than one lender. When you are happy with the results of your inquiry, you can go ahead and apply for the actual amount you need with a customer-centric bank.