Getting rejected for a loan is a painful something. You must have already planned how you’re going to use that money to open three more branches for your restaurant in Warri, Abuja and Lagos, keep small money for potential court cases, and share the rest among your family. But the next thing you hear is a big “NO!” that throws all your dreams away.
For many, one loan can be all they need to make their business dreams a reality. If you think that person is you, then we have the secrets you need to make sure your loan never gets rejected again.
You must know why
When a company offers you a loan, it’s not because they want to dash you money. They are looking for people who will take the loan and use it to do something that will grow their business so they can come back and ask for another loan. The same goes for you. Ask yourself these three questions;
- “Do I need a loan, or can I save my money and wait till I can afford what I want?”
- “Will this loan bring money back into my pocket?”
- “Can I afford to repay this loan if my business plan doesn’t succeed?”
If your answer is yes to all these questions, then you are already halfway to getting approved.
Be entirely sure of your goal and create a plan to best use this loan to improve your current situation.
You must have a stable source of income.
Are you a salary earner on the side, or does your business guarantee that you will receive a specific amount of money each month? If so, then the chances of getting a loan are very high. Many lenders won’t tell you this, but this is the most crucial thing they look at before offering a loan.
Lenders use your most stable income source to calculate how much money you can comfortably pay back.
Most of the time, the more money you make each month, the more money they are ready to loan you. Why? Because most lenders are honest with themselves and you. Nobody would lend you half a billion naira when you can’t earn a quarter of that amount in a year.
This is an excellent way for you to identify dangerous lenders. If a lender gives you an offer that makes you scared that you won’t be able to pay it back, then you should leave it and check somewhere else. If not, you might find yourself paying back money for many years.
Another important tip is to request only what you need. Sometimes life fit land us one-kin-manual-reset-blow, and that stable source of income can suddenly disappear. Live within your means, and you’ll be prepared for whatever life throws at you.
You must have a good credit history.
Have you borrowed money from places that send you scary text messages when you don’t pay on time? If you have, those loan companies have zero tolerance for late payments and will instantly give you a bad report on your credit history. Your credit history is a detailed record of all the loans you have ever taken and how quickly you paid them back. If you have a history of not paying back on time, it would be written there, in red!
If a loan company sees red all over your credit history, they will immediately reject your application. This is because that red is all they need to know that you will be someone they will chase to pay back. You sef, do you like it when customers don’t pay on time, and you have to chase them? So don’t take loans you can’t pay back on time, or you risk never getting the loan your business needs forever!
You should have good collateral.
Even though everyone is living within their means these days, when applying for a loan, that Beetle parked outside is not going to help your case. Collateral is any item you own that has value. It guarantees that you won’t run away to another country and change your name when the loan company asks for their money.
These days, most lenders won’t bother you with collateral, but it always helps to have something strong to state as an asset. A good example is a house you own. This helps lenders believe you’re responsible and shows you can make high-cost payments.
With your details filled in and your bank history ready to be reviewed by your lender, I’m sure these tips would help you feel more confident that you are going back home with the loan you need. If, for some reason, your chosen lender still says no, come and find us. We will have a better alternative for you by then.