Avoiding common borrowing mistakes and get started the right way

Return to All Blogs

Getting the basics right can mean a 5 minute application process with MeLoan

Getting the basics right can mean a 5 minute application process with MeLoan

For a first timer and sometimes even the highly experienced, seeking approval for a finance application can be as overwhelming as it can be challenging and pitfalls abound. From the towers of red tape and paperwork to the various parties’ communication and the seemingly endless legwork it seems like a never ending, stressful journey.

On the opposite side of the coin, when all parties are informed and aligned, things become much easier. But beware, it doesn’t take long for an application to go awry, if there’s a disconnect.

Surprisingly, many start their application process and thinking, be it a property reno, holiday, whatever, without knowing exactly where they are and where they want to be. They simply want to get started and this can be a fast track to disaster.

Prior to getting started, you must have a clear understanding of your current financial situation and be able to accurately answer some key questions. Ask for help if you need to, but you should always be aware of any details regarding:

  • Information on your salary, property, assets
  • Any debts and repayment arrangements
  • Any other earnings

Pro Tip: Have these details top of mind and readily available and this will help matched lenders make their decision and determine the likelihood that you can meet repayments as well as your all-important borrowing capacity.

Prioritise your savings

Believe it or not, many borrowers don’t know just important their savings are, simply assuming they’ll be ‘good to go’ when it comes to the application. It is vital to remember that often, loan options are determined in part by the savings you have available or your spending patterns. You can get more information [link to learn more] from a good broker who will estimate the costs involved (i.e., fees, interest etc) which you’ll also want to consider.

Pro Tip: Prioritise your savings if possible and lock them away, safe from your day-to-day transactions. Keep them separate and secure, to stop your urges to dip in every now and then. Keeping savings away from your usual accounts is key.

Don’t ignore your Credit Status

Don’t ignore your Credit Status

Too many people are fearful of exploring and understanding their credit file, when in fact it can be a vital part of your application and/or future planning. Consider it your passport to your cash loan applications and neglecting its contents can be detrimental. Always disclose any known credit issues before having them pointed out to you. Diving in and getting into your credit file means that any irregularities in your credit history can be identified at an early stage and will reduce their potential impact on your application. Being upfront and owning them helps you to prepare an appropriate strategy to mitigate their impact.

Pro Tip: We strongly recommend reviewing a copy of your credit report so you are aware of what a prospective lender is likely to find out about your credit history and the potential impacts on your application.

Don’t let disorder and confusion spoil everything

Don’t let disorder and confusion spoil everything

It’s important to keep all of your documentation and detail in order, before, during and after your loan application. Disorganisation can lead to small details being forgotten or missed, which could come back to haunt you later. For example, if you are refinancing a loan with a different lender, if you don’t ensure repayments are up-to–date and in good order, even a small loan arrears can be enough for a lender to decline your application, as they may doubt your ability to meet repayments.

Also, keep your income documentation ready and up to date. Your lender or broker will be able to tell you what is acceptable (this will vary for self-employed and PAYG borrowers) so don’t be afraid to ask.

The big take away

To wrap this all up, we have one tip – stay organised. Even simple and straightforward online loan applications like ours [link to how does it work], benefit from a bit of prep so if it’s a fast cash loan you’re after, make sure you’ve got everything ready and you’ll only need about 5-7 minutes to complete your loan application.

Explore more of our blog

With years of experience under our belt, we can provide some tips & tricks to help you save