Many complain: “ I have a clean name and have denied my personal loan application! How can you? ” Thinking of answering this question, we have prepared this post that explains to you why this can happen:
Clear Name Does Not Guarantee Personal Loan Approval
This is a fact that many do not know, but it is true. No bank and financial institution takes into consideration only the clean name factor to release a credit. There are several other points they look at in a credit analysis.
1. Payment History
Even with a clear name, if you do not have a good repayment history, you can hardly get a good loan offer. Depending on the place, your personal credit application will not be approved. That’s because considering your payment history, you’re not part of the audience they work with;
2. Payment Ability
Let’s say you have a clean name and a good payment history (never delayed an account). But if you earn $ 1,000 a month and want a personal loan of $ 30,000 in 30 installments, you certainly won’t get approved. The reason is in the ability to pay. Even if you have no interest, in this loan condition you want, the amount of each installment will come out $ 1,000.00 per month. You could not spend 100% of your earnings to pay off a debt, and there are other bills to pay. So it is good to know that compromising your income greatly influences a credit analysis;
3. Proven Income
One reality is: “The higher your proven income, the higher the maximum loan amount you can get.” This is related to the payment capacity we explained above. A good tip we give readers of this post is to talk about how much you really earn, and can somehow prove it;
4. Other variables
In addition to the 3 important points we explained above, each place looks at different variables such as: customer geolocation, age, type of occupation, and others. Therefore, it is only natural that you are approved at one bank and not approved at another financial institution.
But it’s easier
As you can already understand, the clean name loan is not secured but it sure is a lot easier. Those who have a CPF restriction are often more negative about a personal credit application. Also, those with a clean name are more likely to get lower rates.
Remember that you must take care of your financial life so that when you need a loan to carry out a plan, you will find better opportunities.