8 steps towards a stronger loan application

If you’ve been considering buying a new property or considering refinancing your existing loan, there are a few things that you can do to help increase the chances of your loan application being approved.?

It’s essential to think about the things that lenders consider when they are deciding whether or not to approve your application. Some of these include your credit report, existing debts, income, assets and spending. With this information, lenders can get an idea of your ‘creditworthiness’ and whether or not you could easily make the repayments of the loan you’re applying for. If you’re looking to improve your ‘creditworthiness’ and make yourself more attractive to lenders, here are some things you can do.?

1. Check your credit report

Getting a copy of your credit report is completely free. It’s a good idea to check it over to ensure that there are no mistakes and that all your listed debts are correct. As your broker, I can help you get your credit report.

1. Review your spending

Check your bank statements to see exactly where your money is going and if there are any costs that you can consider cutting out. For example, subscriptions you’ve forgotten about and don’t really use or unnecessary impulse purchases. By cutting out these expenses, you are showing lenders that you’re responsible with your spending. You can also use bank statement reviews to help craft a budget to see areas for improvement.

1. Pay off debt

Ensure that you are keeping up with any debt repayments. This includes any buy-now-pay-later debts as well. It’s also a good idea to make additional repayments if you can. This not only helps you save on interest but also shows lenders that you are responsible with debts.?

1. Consolidate debts

There are circumstances where consolidating your debts can save you money so it’s worth reviewing them to see if this is the case. These debts include home loans, car loans, credit cards and personal loans. Consolidating debts may not be suitable for everyone so it’s a good idea to chat to your broker who can help determine if it could be right for you.???

1. Eliminate extra credit

If you have credit cards in your name that you no longer use, it can be helpful to cancel them. This is because lenders will look at the amount of credit you can access already which will then reduce the amount they are willing to lend you.

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1. Space out credit applications

When lenders see multiple recent credit applications, they may be more wary about lending to you. Therefore, it’s a good idea to spread out your applications for credit over time if you can, particularly if you have been recently rejected for a loan.?

1. Demonstrate genuine savings?

When looking at how much to lend you, lenders look at how well you can save money over time. Although things like cash gifts and inheritances can be helpful towards boosting your deposit, they won’t be considered when it comes to the lender’s assessment of your savings habits.

1. Work with a broker

So I may be a little biassed with this one but an experienced broker knows lenders’ policies and can help guide you towards what these lenders look for in an application. As your broker, I can help you put your best foot forward when applying for a suitable loan.?

Whether you’re looking to buy your first home, wanting to relocate or are keen to invest, I can help you find the right solution for your needs and make your application as solid as possible.?

Get in touch: https://broker.loanmarket.com.au/double-bay/contact/

The information provided on this site is on the understanding that it is for illustrative and discussion purposes only. Whilst all care and attention is taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific personal and business requirements and circumstances. Terms, conditions, fees and charges may apply. Normal lending criteria apply. Rates subject to change. Approved applicants only.