Things to consider before applying for a loan

If you’re thinking about applying for a loan then don’t just jump right in - read this first and take some time to really consider if it’s the best choice for you. Here’s our handy tips on what to think about before you apply.

Be realistic

It’s super tempting to get a loan to make up the extra at the end of the month, whether you’re struggling with essentials such as rent or are thinking about treating yourself. But think about how much you can afford to pay back each month before you take out the loan.

Make a list

Write down of all your monthly expenses that you already have to pay back. For example, rent/mortgage, bills, council tax, transport, car loan and the weekly food shop. Then add the expected monthly repayments from your loan to this list to make sure you can pay it back without going over your budget. Remember to make sure you’ve some money left each month for fun things, otherwise you’ll never stick to your budget!

Be honest

Your mum was right, honesty really is the best policy. No matter how tempting, don’t inflate your income when you’re applying for a loan. Companies will check and if you’re honest you’re more likely to get the loan accepted.

Just get what you need

Again, it’s so tempting to apply for that little bit extra – who doesn’t need more cash at the end of the month? But by sticking to a loan request that’s just for the amount you need, you’re far more likely to be accepted.

Be mindful of your credit rating

There are tons of simple tips for improving your credit rating but the best one is avoid applying for lots of credit at the same time. Identify one realistic loan you need and stick to that.