At any time and moment in your life there can be a situation where your financial luck turns upside down.
One of the financial savers is applying for a personal loan.
A personal loan can help you with a huge expense, like a car, as well as saving you when you are in need of money for an emergency.
However, it is not as easy as it sounds.
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What you need to know about personal loans
According to Vera Nagtegaal, executive head of Hippo, one reason why many South Africans do not succeed in applying successfully for a personal loan is due to debt.
Debt is the main cause of many people battling with money because living expenses and costs have become too great and unmanageable.
In order to successfully get a personal loan the following is considered:
• Employment status: In order to apply for a personal loan, you do need to be permanently employed and have been working for a minimum of six months. It is also important to have a steady income.
• Bank account: You need a bank account that is in your own name and you must be able to show a minimum of three months’ banking statements with a steady salary.
• Affordability: This is when they check your salary, monthly expenses and any other credit you may have to see if you can afford to pay off the loan.
• Credibility: If you have a bad credit score or you have missed payments, your application will automatically be denied.
• Blacklisted: If your credit is too bad and you become blacklisted, then you will not qualify for a personal loan.
• Debt review: If you have decided to go under debt review and pay a monthly amount to pay off your debt, then you cannot apply for a personal loan. Once under debt review, no more credit can be given to you.
The best options are to make sure that you are financially stable from a young age as this will help you build up a good credit score and then you can apply for a loan.
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