Applying For A Loan: 9 Steps To Boost Your Personal Loan Application Rate

Introduction To Applying For A Loan

Applying For A Loan: Most people at some point in their lives will need to take out loans whether it’s to finance their business, or for purchase but the real question here is how to know if your loan application will be accepted or rejected. Unfortunately, you won’t know until the creditor does their analysis and determines your creditworthiness. Many people apply for loans and their applications get rejected while for some people the reverse is the case.

There are several ways or steps to take in making sure that your loan application gets approved. In this blog post, we will be highlighting 9 ways that increase your chances of getting approved loan applications.

1. Income:

When applying for a loan, one of the important factors lenders look out for is the income earned by borrowers. Many lenders require a minimum income, and they ask questions like, do you receive a steady monthly income?  Do they expect you to be employed by one company for an extended period? Do you receive your income through direct deposit?

2. Provide correct loan information

Providing correct information when applying for a loan is super important! If you provide incorrect information, whether intentional or not, this can negatively impact your chances of approval. Make sure questions are clearly read and understood on the application forms and they are answered honestly and transparently.

Lenders will request proof to verify your income and other facts. Pay stubs, tax returns, and bank statements, for example, may be requested. Having these documents available when you apply for a loan can expedite the process and boost your chances of approval.

3. Realistic Salary to Loan Amount:

Another vital point when applying for a loan is the salary-to-loan ratio, what this means is that you can not take a loan that your salary can not cover. For example, you are earning #100,000 as a salary on a monthly basis but you are applying to collect a loan of #2,000,000. The chances that the loan will be approved by any financial institution will be quite slim.

Due to the repayment ratio, most lenders are not expected to exceed 33.3% of your total net salary. Based on your salary from the illustration above. Loan applications like this will be denied due to borrowing an unrealistic amount by the borrower. Don’t ask beyond what your salary can carry for repayment deductions. Lenders want to work with realistic and responsible borrowers who have good track and credit score records with a higher propensity to pay back.

4. Have a strong Credit Score

Personal loan applications with a strong credit history and track record significantly boost your chances of acquiring a loan when compared to those with a low or no credit track record. A higher credit score can boost your chances of approval while also resulting in better loan conditions and interest rates. If your credit score is 750 or above, you have good credit and are more likely to get accepted for a personal loan with favorable conditions and interest rates.

A credit score is a number between 300–850 that depicts a consumer’s creditworthiness. The higher the score, the better a borrower looks to potential lenders. Having a strong credit score plays a key role in a lender’s decision to offer you credit. It gives you a better chance for loan approval and more negotiating power as a borrower.  It also qualifies you for better loans with more favorable terms and rates.

5. Loan Monthly Repayments

Another factor that increases the chance of loan approval is the monthly repayments. Lenders always evaluate whether you can afford monthly loan repayments. In fact, their biggest question always is “can you pay back the loan?” If you can’t satisfactorily prove that you can repay the loan, you’re out of chance. Once you’ve been authorized for a personal loan, make your payments on time to prevent late fees, penalties, and credit score harm.

This can also help you be approved for future loans because lenders will notice that you’re a responsible citizen that can be trusted with credit. Once you’ve been approved for a personal loan, make payments on time to avoid late fees, penalties, and damage to your credit score. This can also increase your chances of getting approved for future loans.

6. Loan Collaterals

Many lenders have specific collateral requirements. If you don’t have the assets to meet those requirements, you’re much less likely to have your loan application approved. Be sure to carefully research your lender’s borrower requirements to see exactly what collateral they require. Some may require specific assets, while others may simply require a personal guarantee or even guarantors.

7. Finding the Right Type of Loan

Finding the right type of loan is another factor to consider when applying for a loan. Lenders have various kinds of loans to meet various request needs. For Example, there are loans that cater to the needs of house rent, Auto or cars, Emergencies, and even education. Various loans also have various criteria such as payback tenure, repayment period, etc. Finding the right type of loan before applying also helps to increase the chance of loan approval.

8. Submit Complete Loan Documents

When completing a loan application, lenders require certain documents to verify your financial history and validity. The documents required may vary from lender to lender, but here’s an idea of the types of things they might ask for:

• International passport.
• Permanent driver’s license.
• Permanent voters’ card (PVC).
• National ID card, plastic, and slip (NIMC).
• Bank statements
• Other documents needed will vary from one financial institution to the other

9. Find the Right Lender

This is the most important aspect of the loan application process. Finding the right lender can make or break your chances of being approved for a  loan. Each lender offers different types of loans and has different borrower requirements.

• Some only lend to established businesses,
• Some only lend to civil servants or government workers
• Some lend only to private working-class employees
• while others lend to startups.

In general financial institutions, the ideal target is to work with businesses or individuals with good credit history, while others care more about the stability and frequency of the annual income.

One such credible lender you can rely on for your loan needs is in the area of

• House Financing
• Auto or Car Loans
• Educational Loans
• Salary Express Loans

10. Debt To Income Level

Lenders will analyze your debt-to-income ratio when analyzing your loan application to see if you qualify for loan disbursement. Check that your debt-to-income ratio is within the normal range. In Nigeria, your debt-to-income ratio should not exceed 33.3% of your basic pay. Before the financial institution will consider your personal loan application.

Student Loans in Nigeria: How To Pay Off Your Back To School Educational Loan Fast

Paying off education loans can be a challenging job, particularly for Nigerians. However, with the proper plan and some discipline, you can pay off your student debts more quickly and save money on interest over time. Here are some suggestions for rapidly repaying student debts in Nigeria:

1. Make a budget:

Before you can begin repaying your student loans, you must first determine how much you owe and how much you can manage to pay each month. Create a budget that contains all of your revenue and expenditures, and set aside a part of your earnings to pay off your student loans.

2. Increase your monthly payments:

Paying more than the minimum payment each month allows you to decrease the overall amount of interest you’ll pay over the life of the loan and pay it off more quickly. For example, if your monthly contribution is NGN 50,000, try increasing it to NGN 60,000 or NGN 70,000.

3. Make use of windfalls:

Making a lump sum payment on your student loans with unanticipated funds, such as a tax refund or windfall, can help you pay off your debts more quickly. Consider using an NGN 500,000 bonus, for example, to make a single amount payment toward your college debts.

4. Refinance with a local bank:

Refinancing your student loans with a Nigerian bank may lower your interest rate and save you money on interest over time. Investigate local institutions to see if they offer student loan refinancing and compare rates and conditions to find the best choice for you.

5. Pay off high-interest loans first:

If you have multiple student loans, pay off the one with the higher interest rate first to save money on interest over time. Consider making additional payments to the 14% loan first if you have two student loans with interest rates of 14% and 10%.

6. Take into account loans consolidation:

If you have multiple student loans, consider consolidating them into one loan with a lower interest rate. This can simplify the repayment process and potentially save you money on interest over time.

Sofri Auto Loan

Why choose Sofri Loans?

We’re glad you asked! Now that you’ve stumbled across our loan’s product page, let us fill you in on a few of the reasons that make Sofri one of the best lenders in the market.

a. Responsible lenders

It’s our aim to give everyone the fair go they deserve, but we can’t just lend to anyone. Sofri sticks to responsible lending guidelines. This means we conduct a full assessment of every application we receive, including a credit check on eligible applicants. We do this to ensure you can manage the loan you’ve applied for. After all, we want to assist you financially to help you with your financial needs!

b. Online-based service and application

With the digital world constantly evolving and expanding, the same goes for the personal loan industry. No longer will you have to print, copy, or make tedious trips to the bank to apply for a loan. Sofri is 100% online. That means you can complete a loan application from the comfort of your own living room in a matter of minutes. If you have a smartphone, you could even apply on the go, so long as you have an internet connection.

c. Speed

Apart from completing a loan application from the comfort of your home, once your application has been approved, the loan will be disbursed into the landlord’s account in less than 24 hours.

Reasons Why Loans Are Declined With Sofri?

Sometimes, there is still a possibility of not being granted a loan. If your application is reviewed, and if it does not meet the set criteria, the loan request is denied. Loans can be denied for the following reason

• Outstanding Debts: If you already have substantial debt, a lender is far less likely to approve your loan application for fear that you won’t be able to keep up with the repayments.
• Expired Documents: Submitting expired documents for loan applications is another reason why you might be unable to access a Sofri loan. Kindly click here to see the proper documents required to access Sofri loans.

What happens if I still can’t access loans from Sofri?

If after meeting all the criteria listed above and you still can’t access a Sofri loan. Kindly reach out to a customer care representative by contacting +23415151119, 08086945596, 07049252678 or send an email address to info@sofrisofri.com or hello@sofrisofri.com and one of our agents will reach out to you within 24 hours.

Conclusion to loan application

Sofri is a digital bank that allows you the convenience of paying as you earn. This means your repayment plan is never more than you can handle. With Sofri, you can manage your income better and channel resources to other needs Our interest rates are the most competitive you can find anywhere. What are you waiting for? Apply for a loan and start the journey to living your dreams.