It is quite difficult nowadays to keep up with your bills and expenses, or to keep small businesses afloat in this current situation with the Covid-19 Pandemic. When it comes to secured or unsecured personal lending, things are becoming more challenging now for everyone. The first thing that comes to mind when looking for a loan is traditional financial institutions such as banks. However, we face a variety of reasons why banks tend to decline our loan applications, leaving us confused and unsure of their outcome, which means turning to alternative ways of smaller amount financing can become a feasible option.
Here are some reasons why getting loans from banks may not suitable for you
When you aren’t able to show a steady source of income through your accounts, banks are not likely to approve your loan application. So, you need to make sure that you are receiving money on a regular basis, whether it be your salary, sales revenue, or any other income coming from trading or selling activities. Any positive transactional history demonstrates a healthy financial situation, and increases your chance of getting an approval.
Banks have recently been forced to increase their credit rating assessment standards. In the wake of this recession a lot of people are suffering from their own financial crises, struggling to keep their jobs and make ends meet to provide for their family. Having a high credit score nowadays looks like an increasingly difficult goal to achieve, and if you don’t possess a score of at least 700 your loan applications would most likely be declined. This is understandable given the current financial situation that they are just looking out for their own interest more to repay back their loans in a timely manner.
Another thing to look at is your debt-to-income ratio. When you have existing debts with lenders, those will show up on your credit report. In most cases, banks would not even consider your credit application if you have much active on-going financing, because you are considered too high of a risk to them because you are already being burdened with making substantial amounts of repayment to lenders. Usually they will also require viable form of collateral to obtain financing from them. Depending on the amount that you are looking for, they often require that you own an asset or two such as a piece of land or property to secure your loan application. If you don’t have any collateral to satisfy their requirements, the bank may still offer you a loan but at a much higher rate than usual. This can become quite a precarious situation for you if you are already struggling to stay on top of your expenses.
Consider alternative source of financing
When you have exhausted your attempts to get a loan from banks, you should look around for another way of obtaining your funding through non-bank entities. Online lenders are normally more flexible regarding loan requirements, and the approval time is way faster. Besides offering competitive rates at a manageable repayment period, they sometimes are more lenient and have fewer collateral requirements than conventional banks. Also, you will get your quick approval decision right away and receive your fund in an instant within a same day.
SpotMeNow has been a reputable personal loan lender in Australia serving thousands of customers nationwide, offering easy and fast application process with a high chance of approval whenever you meet the basic requirements. Apply for a loan quickly at https://www.spotmenow.com.au.