Month: April 2019

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How to Get Approved for a Loan During Financial Hardship

  1. Make a Down Payment

Life is unpredictable, which means that you may find yourself going through financial hardship when you least expect it. Loss of a job, a sudden illness or death, or other unexpected events may leave you with a stack of bills and monetary obligations and not enough resources to pay them with. When you find yourself needing a personal loan, you may wonder if you will be able to be approved during your time of financial hardship. In this article, we will share how to get approved for a loan during times when your finances are not looking so great.

It may seem counterproductive when you require a loan, but having some money to put down when you apply for a loan will show your creditor that you are serious about paying back the money you are hoping to borrow. This will also help to keep your interest rates lower and help you pay back your loan in a shorter amount of time.

  1. Have a Co-Signer

This is especially helpful if your credit score is not so high or you do not have income at the time of your loan application. Having a co-signer will increase your chances of being approved for the loan you are applying for, as your creditor will see less risk in lending money to you if they have another individual who would be willing to pick up payments if you fall behind.

  1. Maintain a Good Credit Score

From the time you begin accruing credit, it is important to always pay your creditors on time and at least the minimum payment each time it is owed. This will show that you are an individual with little risk to lend to, making it more likely that your loan application will be accepted during a time of financial hardship. If you have no income, it may still not be as easy to become approved for your loan as it would be with a job but having a good credit score will make it much more likely that your application will be accepted than if you apply without a decent credit score and a regular means of income.

In conclusion, you may feel as if you do not have anywhere to turn during times of financial hardship. However, these tips can aid you in getting approved for a loan when you need it most. Talk to the professionals at Mortgage Broker Atherton to get informed about your personal situation.

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What Is Refinancing and How Does It Work?

Refinancing, ideally referred to as loan transfer is the process of transferring your existing loan account to another bank or non-banking financial institution with the aim of getting a lower interest along with better services. If you’re not satisfied with your high-cost loan, don’t lose hope as it is possible to move your loan from your existing lender to a new one and save a substantial amount of money.

Well, how does refinancing work? Well, the process of a loan transfer is quite straightforward and we are going to take a closer look at how it works in this brief post.

The first step is to initiate the transfer process by writing a transfer request letter to your current lender. Upon receiving the letter, your lender will review your application an issue a No Objection Certificate along with your payment history.

Once you get the documents mentioned above, you’ll need to submit them to the new lender, where they will be thoroughly verified to ascertain you’re capable of repaying the loan.

After the verification, the new lender will prepare for your account closure by sanctioning the loan amount to your former bank or lending institution. Once the transaction is done, your documents will be turned over to the new lender.

Since refinancing is treated as a new loan, you’ll have to undergo the procedures of technical and legal verification, along with credit appraisals which are done by your new lender. Keep in mind that when your loan account is transferred to the new institution, you will have to pay a loan processing fee. This is one of the biggest cons of refinancing as the costs can be pretty high depending on the amount.

This is generally how refinancing works. However, before you transfer your loan, there are a few important things to keep in mind:

  1. Before refinancing, ensure you go through the terms & conditions including the processing fees, legal charges, stamp duty and other fees you may encounter during the process.
  2. Try and make the transfer during the initial years of the loan. Doing this after three or four years won’t reduce your interest burden as you’ll have paid a large part of the interest by that time.
  3. Before refinancing, it is advisable to compare the interest rates offered by various lenders so that you can find the best ones. At the same time, you should try negotiating with your current lender for better terms and a lower interest rate before deciding to move to another bank. Lastly, only consider refinancing if it results in substantial long-term benefits.