August 13, 2021
No one wants to get a loan at a higher rate, but unfortunately, we have to take a loan at a higher rate due to our own financial conditions. If we know about them already, we can at least work on our personal finances at the right time.
Most of the time, people do not want to work on their financial habits, and when they apply for a loan, they regret it because they only get expensive deals. Do you also want to avail funds at a higher rate? If no, then here are some of the factors that tell about the factors that can increase the total cost of your loan. Have a look at them here-
Bad credit rating
Of course, this is the prime cause for most of the issues in financial life. When we miss repayments of debts and pay the bills late, we face the consequences in the form of poor credit rating. Oh, you already know that? Why don’t you work on that aspect and act responsibly in your financial life?
You are not the culprit all the time if you get a poor credit rating. We all had seen how the world went upside down when things got worst in our personal finances. The pandemic time taught a horrifying lesson. We were never destined for such sort of chaos, but it happened, and countless people lost jobs, and countless businesses got spoiled.
However, we need to get up again and work on your personal finances. It is essential to work on our pending obligations to get back normalcy and find respite in financial life. With a poor credit rating, you can never get a loan at a lower rate because the lender is never in the condition to trust. However, as a choice, some people bring a guarantor, but that too is a problematic option. No one wants to become a guarantor for someone with a poor credit rating.
Another essential aspect clearly indicates that you may have to get a higher interest rate on loan. An employed person with a consistent income is always a good condition to get a lower interest rate. But what about the other employment status concerns.
The partly employed and the unemployed are the two major factors on the part of employment status that make lenders offer only higher rates. Yes, the loan options are there, such as the guaranteed same day loans for unemployed, but the interest rate cannot be too low. The customisation feature helps, but technically, your income status is the prime factor that leaves the impact.
With the help of some other factors such as an appointment letter of the new job can help make some difference but again you cannot expect a low rate. It is not always about the lender. It is also about the lending rules that even the most flexible lender cannot break. The regulatory authorities do not allow the financial institutions to allow much flexibility on the interest rate and repayment plans to an unemployed person. In addition, the partly employed and unemployed people have the same situations to face.
Wrong information in the credit report
Maybe you are aware of this fact, or perhaps you are not, but a tiny piece of information wrongly mentioned in your credit report can make you get a loan at a higher rate. It is why financial consultants always suggest checking the credit report before applying for a loan.
There are incidents in which people even lost their jobs because a wrong detail was mentioned on their credit report. A pending loan amount that belonged to someone else somehow got mentioned in their report. Sometimes due to a slight difference in the spelling of the names of two people causes such mistakes.
Credit reference agencies make our financial reports from the information obtained from different sources. During the process of information accumulation, mistakes happen. Maybe you have a good credit score, a good income and everything is fine, but an incorrect detail mentioned in your financial report can cause you great harm. If you take a loan, you have to get a higher rate.
It is essential to be smart and cautious about your financial behaviour as well as a financial report. Small factors can also affect your eligibility for a lower interest rate on loan. It is always a good thing to tailor your financial behaviour and check your records now and then. Work on all the aspects as mentioned earlier if you have not worked on them yet and make sure that in future everything is fine. In case of confusion, who not take one month help from a financial consultant because that is necessary to play safely in personal finances.