Loanplace

Thinking about buying a new car? Awesome.

Planning to borrow money to do so? 

Don’t sign anything without reading this article.

Lots of Kiwis will buy their next new (or used) car from a dealer.

You’ll head to the car yard, test drive a few vehicles, then enter into the classic conversation with the car dealer where you start talking about warranty, registration and price.

Most car yards in New Zealand will — conveniently — offer you the chance to buy your new car on finance. 

They’ll even advertise their vehicles in terms of “from $XX a week”, instead of actually telling you the true price of the vehicle. 

Now, when you’re on the spot, standing next to the car you’ve had your eye on and the dealer is next to you offering to do the paperwork there and then…

It’s important to stop and consider whether this seemingly convenient option is, in fact, the best and most financially sensible for you.

While most people will jump at the chance to get in the car and drive it out of the dealer’s yard, the reality is you probably aren’t being offered a great finance deal.

How To Get The Upper Hand When Negotiating To Buy A New Car

The reality is that some car dealers are experts at confusing prospective buyers into forgetting the true value of a car and signing up to a less-than-great finance deal just so they can drive it out of the yard the same day.

There is one major thing you can do — without spending a cent — to give yourself a better chance of negotiating a fair deal with the seller and not get taken advantage of. 

What is it?

Simple: Get a quote or pre-approved car finance application for the amount you’re willing to pay for the vehicle. 

(You can do that with Loanplace right here, by the way.)

This gives you a strong idea of how much the loan should cost you based on your budget and credit score.

If the car dealer tries to talk you into a deal that offers you less value or costs you more money than your pre-approved application shows, you’ll know they’re potentially looking to take advantage of you.

To learn more about your credit score (an important part of the car finance process), read our article here.

Make Sure You Protect The New Car You’re Borrowing Money To Buy

If you’re borrowing to buy a new car, there’s another thing you must consider before taking an on-the-spot finance deal from a car dealer.

As soon as you buy a new car, you’re taking on a set of liabilities — things that might end up costing you money as you use the vehicle.

It’s worth considering whether the finance deal you opt for offers you any protection for things that might pop up in the future.

Don’t let a car dealer sweet talk you into taking an average car loan just so you can drive away on the day.

Make sure you get a deal that delivers maximum protection.

Obviously, we wouldn’t be telling you this if we didn’t offer that type of additional protection here at Loanplace.

When we work with our customers on creating the perfect car finance deal for them, we’re able to offer a range of bonus services, such as:

• Comprehensive Vehicle Insurance

Protects your new car against fire, theft and collisions no matter whether you hit something or the unexpected happens.

• Iron-Clad Mechanical Cover

Full breakdown and repair insurance to cover you if you need to pay for towing or mechanical work.

• Protection Against Loss Of Value

Stops you from having to make big repayments on a car that’s no longer worth what you paid for it.

• Financial Protection In Case Your Situation Changes

Cover yourself in case employment or family events prevent you from being able to make your car loan repayments.

Is your car dealer offering you any of those options? Ask them. If not, why not?

We encourage you to do your research, understand your credit score and ideally approach buying a new car with a pre-approved finance application to stop sellers trying to take advantage and keep the real value of the vehicle hidden behind confusing finance deals. 

Our team are experts on the ins and outs of car finance — meaning we know ALL the tricks other lenders will try to use to get you to take a loan that might not be ideal for your situation.

To discover how much you might be able to borrow for a new car, get in touch with us today for a free, no-obligation consultation.

When we talk about your ‘credit rating’, we’re talking about your entire history of financial decisions.

That might sound scary, but it doesn’t have to be.

See, every time you apply for a loan, a mobile or internet plan, mortgage or credit card, for example, the provider has to check whether or not your history demonstrates you will be able to afford the payments.

Every time you apply for a financial product or service, the details of that application enter your credit report.

Your credit rating is the sum total of your applications and the rate of success or failure you have had in both obtaining and repaying loans.

This means that every time you apply for finance, you’re not really going up against some big bad company who doesn’t want to lend you money. 

Really, you’re going up against your own financial past.

If your credit rating reflects a long history of successful applications and diligent repayments, you’ll generally stand a higher chance of succeeding with new applications. 

But, if you have a long history of missing payments or being chased by debt collectors, for example, chances are you’ll find it more difficult.

Simple Ways To Protect & Improve Your Credit Rating

If you already have a good credit rating and you want to keep it that way, here’s three things to keep in mind.

Keep on top of all your accounts: Whether it’s your mobile phone, your Sky account, broadband connection or home utilities accounts, make sure you stay up to date with payments. 

This shows the credit rating agencies that you can be relied on to meet your payment obligations. 

Minimize your debt: OK, we know sometimes you have to borrow to improve or stabilize your financial position. 

But think carefully before you borrow. 

The more debt you have to your name, the riskier you might seem to potential future lenders, because this debt will show up in your credit rating. 

Show stable income and living arrangements: The longer you’ve been earning income from a job, and the longer you’ve owned or rented your home, the more likely your credit rating will demonstrate stability and reliability — two things which finance companies like to see when assessing a loan application.

Common Pitfalls That Can Damage Your Rating And Make It More Difficult To Get A Loan

At Loanplace, we see a LOT of finance applications. Time and time again, we see people making the same mistakes and costing themselves the chance to secure a loan at a good interest rate. 

Here’s three things to avoid if you’re looking to build a good credit rating:

Applying for heaps of loans: This is important. You don’t have to obtain a loan for your credit rating to change, you only need apply. 

There’s no sense applying for 10 loans in a single day when each company you apply for can see you’re applying to the nine others. 

The better option is to do your research and apply for one loan, not many.

Accepting payday loans: These high interest, short-term loans are sometimes necessary for those trying to alleviate urgent financial problems. 

But the reality is that accepting a high interest loan like this demonstrates to credit rating agencies that you may be in financial hardship — making it tougher to get accepted next time you need finance. 

Gambling before applying for finance: Successful loan applications require proving your income and financial behavior via bank statements. 

Lenders will look for evidence of gambling. 

This can negatively impact your chances of getting approved, because lenders ideally want to give you finance to improve your financial situation, not make it worse. 

To learn more about your credit rating and discover how much you might be able to borrow, get in touch with us today for a free, no-obligation consultation.

Your mortgage is not what you think it is.

It’s not just a debt to the bank that you have to pay off to live in the house you bought.

It’s not just another bill you’ve been dealing with every month since you moved in.

In fact…

It could be your ticket to accessing a pile of extra cash.

Let us explain.

Your mortgage is a measure of how much equity you have in your home.

The more you pay off your mortgage, the more your house belongs to you (and not to the bank).

As you build equity in your home over time, you don’t just chip away at your mortgage.

You create a financial and real asset.

See, you can — if your financials meet the lender’s requirements — use that equity as security for extra cash, or a ‘second mortgage’.

And you can use that extra cash pretty much any way you like; renovations, travel, consolidating debt or buying a new car.

If you’re a homeowner and you’re trying to obtain finance, then listen up.

Your Home Equity Could Be Your Ticket To Tens Of Thousands Of Dollars In Extra Cash

When finance companies and brokers in New Zealand assess your loan application, they’re bound by regulation and law to examine your income and assets. 

That means you can’t borrow more than you can afford to repay.

If you own a home and you’ve been paying off a mortgage, applying for finance could be way easier than you might think.

That’s because having home equity not only shows that you have the income to pay off your mortgage…

It also proves to lenders that you own a valuable real asset.

You have the right to ‘borrow against’ the equity in your home.

In other words, the part of your home that you’ve paid off becomes the ‘security’ for any extra cash you might need to borrow.

Many people use the equity in their first home to borrow the money to buy a second property.

That’s why you’ll often hear this type of loan called a ‘second mortgage’.

It’s also called ‘caveat lending’.

The Reserve Bank of New Zealand limits this type of lending based on the ‘loan-to-value ratio’ or LVR.

The regulations mean you can access up to 80% of the equity you have in the home you live in and up to 65% on a property you rent to a tenant.

So, if you own a home and you’ve been paying down your mortgage…

We May Be Able To Approve Up To An Extra $150,000 For You Using Your Home Equity 

To get an idea of exactly how much extra cash you might be able to access based on your home equity, speak with one of our caveat lending consultants today.

Some common reasons for accessing finance through caveat lending are:

• Freeing up extra cash to invest in renovating your property…
  
  
• Consolidating or paying down higher interest debts to improve your overall financial position…
  
  
• Financing a second property or business investment …

Generally speaking, homeowners do enjoy a quicker and easier loan application process thanks to the security that owning equity in a home provides to lenders.

But, getting approved for a second mortgage or caveat loan will depend on your unique financial situation and the amount of equity you have available in your property.

So if you own a home — whether it’s your own or one you’re renting out — you may be sitting on a way to access up to $150,000 in extra cash.

To learn more about caveat lending and discover exactly how much you might be able to borrow, get in touch with us today for a free, no-obligation consultation.

Getting approved for a personal loan in New Zealand depends on one thing; proving a steady and stable income.

That’s because lenders need to be able to see that those they loan money to
have the means to meet their repayments.

You can’t lend someone money if you can’t reasonably expect them to pay it
back, right?

For most finance customers in New Zealand, proving their income is easy.
You simply provide a bank statement that shows regular income hitting your
account, tell your lender the details of your employment or income source, and
from there the finance company can assess your financial situation against
your loan application and (hopefully) approve your loan.

But, what if you don’t have a regular employment income?

What if — like many Kiwis — you make a living working for yourself and you
need access to finance.

In our experience, many hard-working self-employed people run into trouble
when they apply for a loan.

Because most lenders simply don’t want to do business with customers whose
income fluctuates and they can’t easily predict.

Maybe you’ve experienced this.

If so, we have some Good News For Self-Employed Kiwis Looking For Finance.

For many lenders, the words ‘self-employed’ are a red flag.

But in many cases, the reality is that working for yourself can be more
rewarding and profitable than working for someone else — even if it does
make your income more difficult to predict and forecast.

Here at Loanplace, we respect and admire those who are having a go at
running their own business and working for themselves.

And we reckon it’s not fair that those taking a risk and backing themselves like
that don’t get access to fair finance.

That’s why we want our customers to know that while it can be difficult obtaining
a personal loan as a self-employed person…

You may be able to access a loan if you can show that you will use the money to
develop or grow your business (and therefore potentially increase your
income).

For example, if you’re working for yourself or running a business, you may
need finance to:

• Buy new stock or inventory
• Invest in a marketing campaign to generate new business
• Cover the cost of equipment repair or property maintenance
• Hire extra staff to help boost your revenue
• Plus five more ways to use a loan to help your business (speak with us about these today with zero obligation)

We May Be Able To Help You Finance Your Business Up To $150,000

Loanplace exists because our founders quit their old jobs, took a risk and went
out on their own to start their own business.

So we understand the challenges self-employed Kiwis face.

We think it’s important that you know — especially if you’ve already
experienced the disappointment of being turned down for a personal loan…

That while it might be difficult to get finance as a self-employed applicant…

In other cases you may be able to get approved because you’re self-
employed.

Of course, you do need to be able to demonstrate a good cash flow from your
work.

(We can help you do that here)

You may also be required to use assets like a vehicle or property to help
secure the loan.

But the point is, being self-employed doesn’t mean you can’t access finance.

Loanplace can help customers with a good cash flow and business plan
access loans up to the value of $150,000 (this of course depends on individual
circumstances and we can’t offer any guarantees). Find out more here.

Chances are in the past couple of months you’ve seen or heard some rather scary stories about so-called ‘pay day lenders’.

TV news and social media ran stories in June about how the Commerce Commission is taking one business to the High Court of New Zealand over allegations of irresponsible lending. 

Naturally, the story has caused everyday Kiwis to pay attention to this business, and others like it.

If the story worries you…

Or makes you second guess whether it’s smart or safe to borrow money in New Zealand right now…

Good.

Because here at Loanplace we think the more educated and aware you are about borrowing money, the better.

The better it is for you, for businesses lending money… for the whole industry.

So, in this brief post, we’re going to address a few important points.

The point isn’t to sell you anything (though of course our business is providing fair finance to everyday Kiwis — more on that here).

Our objective here is to explain what’s going on with the Commerce Commission’s case… and show why the kind of lending practices they are aiming to crack down on are, in fact, bad for everybody in the finance industry.

‘Finance Company’ Does Not Equal ‘Pay Day Lender’

547.5%. 

That’s the interest rate some people have been agreeing to when they’ve taken on what’s known as a ‘pay day loan’.

If someone is in the position where they need to borrow money at an interest rate that high… how can they reasonably be expected to repay more than SIX TIMES that much money?

It’s pretty basic. 

If you find a lender offering money at an interest rate like that, you must understand the repayment demands.

For now, this sort of thing isn’t illegal. That’s probably going to change very soon. 

But in the meantime, we advise you not to accept any loans at interest rates that could make your financial situation worse, not better. 

(Loanplace doesn’t ever approve a loan with an interest rate higher than 25%.)

Why We’re HAPPY There Are People Complaining About Us Online…

If you look around our social media pages, you’ll find people commenting that Loanplace is “a scam” and complaining that we’re discriminating against people by not lending money to those who don’t have enough income or assets.

This is criticism we’re happy to have.

Here’s why.

Loanplace exists to provide fair finance to everyday Kiwis with friendly, fast and personal service. 

We aren’t here to arrange finance for people who can’t afford it…

Whose financial situation means a loan would actually hurt rather than help them…

Or to force those who don’t understand the rules of borrowing money to pay back four, five or six times the amount they borrowed.

In other words…

We feel it’s far better to have people complaining that we won’t approve their finance application that to have customers who can’t afford to make the repayments on their loan.

If A Loan Is Bad For You, It’s Ultimately Bad For The Business You Borrow From

A high interest loan that takes you years to repay and potentially damages your credit rating is, obviously, not the most sensible option.

But it’s not just bad for you if you can’t afford to pay it back.

It’s actually bad — over the long term — for the business who lends you the money.

Think about it.

If a business approves loans for 100 customers and only, say, 10 of those customers actually manage to repay it, then the business is in trouble.

This is why you find companies like those the Commerce Commission is targeting charging massive interest rates — they’re trying to cover their costs and protect themselves from customers failing to pay their loans back.

To us, that’s a pretty bad business model. 

Not just because it puts customers in financial difficulty. 

But because it creates uncertainty and unsustainable conditions for the business. 

Our model is different. 

We only approve loans for customers who understand their repayment obligations and have a reasonable chance of paying back their loan without entering significant financial hardship. 

Our team of professional finance consultants don’t approve loans for everyone (see the complaints on our Facebook page).

In fact, we’re so serious about providing fair service to our customers and creating a sustainable business that we’ve invested in creating proprietary software that allows our team to accurately determine whether it’s sensible to offer a loan to a customer. 

We also specialize in debt consolidation. 

This involves looking at our customers’ existing loans and repackaging them into one debt at a lower interest rate.

In other words, we believe that what’s in our customers’ interests is in our interest (and that insanely high interest rates are not good for you OR us in the long term).

So, if you’ve seen the stories about the Commerce Commission’s case against ‘pay day’ lending in New Zealand…

And that’s made you think carefully about the rules and realities of borrowing money…

Great!

We encourage all our customers to familiarize themselves with the conditions under which they borrow money from any third party.

For more information, please check out this article about Responsible Lending: https://www.consumer.org.nz/articles/responsible-lending

Sources:

https://www.tvnz.co.nz/one-news/new-zealand/moolas-alleged-interest-rate-breaches-shows-system-not-working-like-should-finance-expert

https://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=12247594

Did you know you can get finance to purchase cars privately!? This means you can buy a car off TradeMe, off a friend, or even off the side of the road just like you would at a car dealer.

This gives you the power to find the exact car you want at a much lower price than you might find at a dealer.

Surely there is a catch?

Not at all! Finance companies are happy to lend you money for a car no matter if it is from a registered car dealer or for a private sale.

The conditions are the same however… The car must be fairly new, usually less than 5-10 years old and you must get full insurance for the vehicle.

How Do I Pay The Seller With Finance?

This is actually a lot easier than it sounds. Usually the whole process is the following 4 steps:

1. Get pre-approved for finance up to a certain value (Shameless plug: We can help with that here)
2. Take the ‘Sale Agreement Form’ from the finance company with you and get the seller to fill it out.
3. Send the form back to the finance company and sign the loan contract.
4. The finance company will then pay the seller directly and you can go and pick up the vehicle!

That’s it!

Ready To Get Finance For Your Next Car?

Here at Loanplace, vehicle finance is our specialty. We have access to several Finance Companies and can get you rates that no one else can.

Our team will guide you through the entire process from getting approved for finance, right up to picking up your new car.

With decades of combined experience in the vehicle industry, we can provide you with advice on vehicles, insurance for the vehicle and getting you the best deal possible.

So head over to our Car Loan application page now and see how we can help you.

Often in life you can find yourself in a bit of a pickle when it comes to money. Maybe some unexpected bills came up that you were not prepared for. Perhaps you needed to buy a car to get to work. Whatever the reason, it happens, and there are a few things you can do to help get yourself into a better situation fast!

1. Focus on the highest interest rate first

If you have multiple debts, say a credit card, a hire purchase and an overdraft, it is important to pay these off in the correct order so that you can get out of debt fast and save the most money.

So the first thing to do is find out what the interest rates are on each of your debts. Often credit cards or payday loans are going to be the one with the highest rate.

Now you have figured out the highest rate debt, you need to pay off as much as you can each month rather than just the minimum payment. The reason for this, is everyday interest is calculated on your debt, so the lower the amount of debt on each day, the less interest you will be charged.

In the long run, this means you end up paying the debt off faster and also it costs you less because you are paying less interest.

2. Credit Card balance transfers

Did you know that different credit card providers offer an interest free period when you transfer the balance of a credit card from another bank to them?

Often the big banks have a 6 month or even a 12 month interest free period when you transfer the balance. That means on a credit card debt of $5000 at an interest rate of 19.95% you would save nearly $500 over a 6 month interest free period.

Now of course this only helps you if once you transfer the balance, you pay off as much as you can each month. Don’t just pay the minimum amount. This is to drop the balance as much as possible while in the interest free period.

If you get to the end of the interest free period and still owe money, nothing is stopping you from doing another balance transfer to a different bank to take advantage of another interest free period.

3. Consolidate Debt into a single repayment

Another option is to get a ‘Debt Consolidation’ loan, which brings all your debts together into a single, easy to manage repayment.

Often this winds up to be the most manageable solution for someone with many debts, as it makes the monthly repayment much smaller and can often be at a lower average interest rate.

Find out more about what a debt consolidation loan is here. If you have any questions about getting a debt consolidation loan feel free to give us a call on 0800 461 228.

Having to pay off multiple debts at once can often become overwhelming and easily spiral out of control. Perhaps you have a credit card payment due as well as your car loan payment and by the time you pay the credit card, there is no money left over to cover the car loan as well.

What does it mean to consolidate a loan?

Consolidate means to combine things into a single more effective whole. When it comes to a debt consolidation loan, that means we are bringing all of a persons debts into one single more effective loan.

This usually results in a much lower interest rate than all of the individual loans and also makes it very easy to pay off as there is only one single repayment.

Why would I consolidate my loans?

There are a few very good reasons why you would do this. Lets take a look at them.

Saving Money: 

A debt consolidation loan can reduce the overall interest you are paying by bringing high interest debt into a low interest loan. It can also save you money by having less fees to pay. Often payday loans and credit cards charge you additional ‘payment’ fees or card fees.

Makes things easy:

Meet Sam. He always gets paid his wages monthly on the 20th of each month. His credit card payment is due on the 16th of each month and the hire purchase loan is due on the 23rd of each month.

He finds it easy to pay the hire purchase loan off, as it always comes just after he gets his monthly pay. But by the time the 16th rolls round, he often struggles to get the money together to pay the credit card and is worried he will start missing payments.

If Sam got a debt consolidation loan for both of these loans, he would now only have one single repayment that he can line up with his pay on the 20th of each month.

Now as soon as he is paid, he can pay his loan payment as well, which means he can live stress free for the rest of the month.

He also has flexibility with the loan term and could decide to spread it out over a longer term than previously which would allow smaller weekly repayments.

Helps your Credit Rating:

By having only one monthly repayment, it means you are less likely to miss a repayment which keeps your credit rating in good health. Also having only a single loan repayment in your bank statement history, looks much better to potential lenders in the future.

Becoming Debt Free Faster:

Because you would only have a single repayment, it makes it much easier to plan ahead and determine when you can become debt free. Use our loan calculator to see an estimate on what repayments might be.

Interested in applying for a Debt Consolidation loan?

Here at Loanplace, debt consolidation loans are our speciality. If you would like to know more, get in contact with us and one of our friendly team members can answer any questions you might have.

If you are all ready to apply for a debt consolidation loan, go here.

When it comes to personal finance there are a lot of different approaches and ideas out there and often it can be hard to tell what is good advice and what isn’t.

Below are 5 of the most common myths around personal finance.

1. Income is the same as Wealth

Often people confuse these two concepts as being the same thing. Surely people who earn a lot of money are wealthy right? Well that’s not always the case.

Many people earn more than enough money to become wealthy they simply do not hold on to the money they earn and end up spending it on various unnecessary things.

Likewise even on a low income, if most of the money is saved or invested that person can find themselves with a very healthy bank account.

There is a fantastic article on this very myth here.

2. Having a Credit Card is a Bad Idea

You might have been warned about credit cards in the past by friends or family. They usually tell you some horror story about a person getting into mountains of debt at a high interest rate.

Now that scenario can definitely come true but with some financial discipline you can make credit cards work in your favour.

First of all, having a credit card and paying it off in full every month, not only incurs zero interest for you, but also helps you build up a healthy credit history that can help you with getting finance in the future like a car loan or a mortgage.

A second use of credit cards that not many people are aware of are their ability to earn you rewards points. Certain credit cards come with a rewards points scheme such as a frequent flyer program or flybuys.

How this works, is every dollar you spend on the credit card usually translates into 1 reward point.

So one strategy you might use is if you purchase everything on your credit card that you would’ve usually purchased on your eftpos card you will now be getting rewards points which build up very fast.

But wait, won’t that cost me interest!? If you pay off your credit card in full every month, you do not get charged any interest at all. That means as long as you stay disciplined, you will be earning rewards points absolutely free!

3. I Don’t Earn Enough to Save Money

Often people say, that because they have a low income, there is no point in saving money. This couldn’t be further from the truth!

Even saving $20 a week would leave you with just over $1000 at the end of the year. Imagine how many presents you could afford with an extra $1000 at Christmas time.

Saving money, like anything else, is a habit. Once you get in the habit of putting money aside every week, it quickly snowballs and you end up building quite a healthy savings account.

A good strategy can be to put aside a certain percentage, say 10% of your pay into a savings account then as you earn more money, you maintain the same percentage. So if you earn $500 a week now, that’d be $50 into savings.

It’s never to late to start saving money and the sooner you do, the more wealth you will create.

4. Buying is Better than Renting

This myth has been hanging around for many generations. It stems back to when the housing market was in very different shape and it often was the case that buying a home was a good investment.

In reality, people do not factor in all the additional costs to home ownership such as interest payments, repair costs, legal fees, rates and insurances, the list goes on.

Renting on the other hand, puts all that responsibility on the land lord and the person renting the house simply has to worry about paying the rent.

If you don’t like the house or the area anymore, you can simply up and move in a relatively short time frame. Selling a house can take a minimum of 30 days up to many months, if you can’t find a buyer.

Your monthly rent is also often much cheaper than the monthly mortgage payment for the same house. This allows you to use that saved money to put into better investments.

5. You have to be Rich to Invest

Only wealthy people invest in stocks or own investment properties right? Wrong.

Anyone can invest their money and you can start with a relatively small amount too. Often the first and best place to start, is investing in a whole market instead of a single stock.

This allows you to spread your risk and over the long term, usually beats a savings account interest rate. This can be done by purchasing shares in an ETF (Exchange Traded Funds), there is a fantastic guide here on ETF’s.

Like saving money, investing is a habit. As you form your good savings habit, you can easily move into investing as well.

Watching your money grow overtime is very exciting and even if you are only growing $100 you will still get great satisfaction out of watching it grow bigger!

Getting your first loan can be an exciting time, whether you are getting it for your first car, a holiday or even to consolidate some debt.

But this time can also be a cause of stress if you are not prepared for what is involved in applying for a loan.

Meeting the criteria

The main thing you need to do before applying for a loan is checking if you meet the criteria. Every lender has different criteria, so it is important to understand this before you send in an application.

Usually you would have to meet the below:

1. Be at least 18 years old
2. Live in New Zealand (or the country where you are applying for the loan)
3. Be a permanent Resident (Some lenders will lend to work visa holders however)
4. Be employed or have an alternative means of income (such as a WINZ benefit)
5. Meet a minimum income criteria (Often around $500 a week income)

Now of course some of these criteria can be by-passed in certain situations. For example, if you do not have an appropriate weekly income, sometimes a co-borrower can be used to meet the criteria instead. But more on that later.

Applying for the right amount of money

The amount of money you want to borrow is another big factor on whether or not a lender will give you the money. Personal loans are supposed to help you out in the short term but not harm you in the long run.

If you wanted to borrow $50,000 but only earn $200 a week as a part time employee, the lender would not approve the loan as you would unlikely not be able to afford to pay it back.

A quick rule of thumb here is once you have calculated the repayments per month, if you still have at least $900 left over after all your expenses (food, rent, power etc), the lender will likely approve your loan.

Build a good credit history

You may have heard before that you need a good credit history in order to apply for a loan, but what is a good credit history and how do I get one?

An easy way to build up a credit history is to have a monthly utility bill in your name that you always pay on time. For instance you might have a phone bill for your mobile phone that you pay every month.

This shows to a potential lender, that you are reliable at paying money that you owe and gives them more confidence in lending you the money that you want to borrow.

Is no credit history a good thing? Unfortunately it doesn’t help you get a loan as now a potential lender has no way of seeing if you have been reliable at paying bills in the past.

So if you currently do not have a credit history, that is something you will need to start working on.

Have tidy bank accounts

When you apply for a loan, most times a lender will want to see your last 3 months of bank statements. This is so they can see your spending habits and your general approach to finance.

In order to help them see your good money habits, make sure you have your salary always put into the same account so it can easily be seen you are getting paid the amount you say you are.

Make sure you do not overdraw your account, this way you show you have good budgeting skills and know how to manage your finances well. This will give a lender even more confidence in your application.

Have a savings account and show a good history of putting money aside into this account. This shows your budgeting skills and that you are able to plan ahead.

Ready to get a loan?

If you think you have all the above covered, you are ready to apply for a loan. Here at Loanplace we have an expert team that can help you get the finance you want at a fantastic rate. Check out our loan repayment calculator and get started now.