5 steps to help you get a personal loan approved

Understanding the tools that lenders have at their disposal is vital to improving your chances of getting a personal loan approved.

To help simplify the process for you, we’ve compiled 5 simple steps that can go a long way towards reaching approval on the funds you need.



1. Minimise ATM cash withdrawals and excessive discretionary spending.

With access to your bank statements – lenders can easily calculate the percentage of income being withdrawn at ATMs. This can be a red flag on your application when calculating expenditure, with lenders often viewing transactions as discretionary spending, or even gambling.


Rather than withdrawing cash to budget or save, open a separate bank account and limit access, by not having a debit card for the account. Online banking and immediate transfers between accounts make it simple to create multiple accounts for a variety of uses. As an example, have a ‘rainy day fund’ for savings or an ‘everyday’ account for general living expenses. This shows lenders your capacity to manage your everyday expenses, savings and existing commitments, whilst also accounting for all income in your bank accounts. Read more about how cash withdrawals affect your loan application here. 



2. Prevent dishonours on bank statements and financial commitments.

When applying for credit, it is important to show good repayment history with lenders on existing financial commitments. Consistent dishonours on your bank statements show lenders an inability to budget your money.


Sometimes these dishonours are out of your control and most lenders are aware of this; if you find yourself in a situation where you could miss a payment, it is always best to contact the lender prior to the drawing date and attempt to organise a resolution. Loan assessors would prefer to see clients organise ‘make up’ payments, rather than dishonour and bury their heads in the sand! Dishonours on current loans may be an indicator you will do the same on the new loan you are applying for, so if possible, avoid missing payments as this is a significant factor when assessing your loan application.



3. Avoid using payday loans for everyday expenses

Payday loans are a quick and easy solution for finance; however, they end up hurting borrowers with high interest and large ongoing repayments. Payday loans may be a viable option for unexpected emergencies or unforeseen financial situations, but they will have an adverse effect on your credit score and chances at finance for the future.


If you are struggling financially with your ongoing commitments, look into the possibility of obtaining a consolidation loan to manage your repayments or even entering into short-term hardship so you can get on top of your financial situation.


Most importantly, lenders will look unfavourably at the use of payday loans to facilitate general living expenses and could mean the difference between declining and approving your application. If you can avoid enquiring and using these types of loans, it will reflect positively on your application for finance.



4. Avoid a high volume of bank transfers

Some borrowers prefer to siphon funds from different accounts on a daily basis for existing repayments and general living expenses. Not only does this behaviour run the risk of dishonouring on financial commitments, but also makes it difficult for lenders to track your bank statement activity.


The easier it is for lenders to evaluate the inflow and outflow of income and expenses, the faster they can reach an assessment decision. Try and keep your bank statement activity as clear and concise as possible so lenders can reach a decision without any degree of ambiguity.



5. If you are uncertain about your chances of finance, ask for advice!

If you have any questions about your borrowing capacity or how your application might look to a potential lender, it is always a good idea to consult a broker. A broker is a go-between, who deals with banks or lenders to arrange a loan for you.


They will help to find you a potential lender that will assist with your application requirements, or give you tips that will improve your application for the future. If you are unable to find a broker and are looking for an alternative lender who will tailor a loan solution based off your situation, LoanU is here to help. We specialise in helping people who have been through financial stress to move forward, with a loan which can rehabilitate your credit score.



Check if you qualify for a loan with LoanU – without damaging your credit score by entering your details into our qualification calculator.


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Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or requirements. Therefore, please consider whether the information is appropriate to your circumstance before acting on it and seek independent advice from a finance or legal professional if necessary. All loans are subject to a full application and assessment by United Loan Solutions Pty Ltd trading as LoanU (Australian Credit Licence number 486303). LoanU is part of the PF Group Holdings Pty Ltd group of companies.



Get started. Talk to a finance specialist today.

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PO Box 1995, Toowong DC, QLD, 4066