Loan help for first timers
Getting a loan approved are in some cases not an easy procedure, especially if it is your first time applying for credit, as loan lenders and credit providers, screen loan applicants carefully and adhere to the national credit act. One of the easiest ways to check, whether you qualify for a loan, is to apply for a online loan, as you can have an answer almost immediatly.
Always look for the best option:
You can approach a friend or family to make a request, but if that fails, you can apply for a loan at most bank or online loan providers.
First of all you need to determine what type of loan you need to apply for, for smaller amounts up to R4000 it can be easier to apply for a payday loan or even a short term loan with a repayment period that can go up to 6 months.
For larger loan amounts, you will be looking at personal loans or longer term loans, which can go up to R200,000 with repayment periods up to 72 months.
It is always best that you just consider taking a loan amount that you can afford to pay back, as taking on more credit than you can afford will lead you into problems later on.
Evaluating your loan repayment potential
From your side you need to consider your credit score and your ability to take out a loan especially your ability to keep up with the monthly loan payments until such time when the loan and all cost is settled in full.
When a loan company do their assessment they will also be looking at your score and your ability to repay, it is called a: credit assessment and affordability assessment.
Credit providers will also have other qualifying criteria, take look at Basic Criteria for loan applications, these basics may vary from lender to lender, but be sure that every lender will first consider their basics before even considering your application.
Credit providers will normally ask certain documents from you to assist them in their assessment. Documents that normally gets requested will be documents like your ID, latest payslip and latest 3 month bank statement. From your side you can always speed up the process by making sure that your documents is correct.
Always read the contract or pre-agreement
When it is time to sign on the dotted line, always read the contract and make sure you understand the detail of the agreement, never just assume that it is only a formality, as it is a vital part of the loan. Some lenders may do a voice contract with you so make sure, you request that they send you a copy of the terms and conditions as the voice contract will be binding and if you have a copy you can always refer back to it.
Make sure your loan repayment is on time every month
Settling your loan early is always a good thing as you will get discount on cost of credit and might find that you end up paying less for your loan, but settling your loan early won’t necessarily have an effect on your credit score, as paying the installments through the term of the loan indicates that a person is responsible and can manage their finance over a period, which will have a positive effect on your credit rating.. Paying your loan on time every month not only show that you are responsible it will also save you money in the long run, because most lenders will charge you extra for late payment or skipping an installment.
Remember: Make sure that you add your new monthly obligation to your budget as you want to keep up paying your installment.