There are many factors to consider when borrowing money – loan tenure, interest rate to pay back, method and process of repayment, to name a few. This week, we take a step back from all the clutter to provide you with our three basic guidelines for any borrower across all mediums to ensure a successful loan.
1 – Learn the Rules
No two financial institutions use the same process. A money lender might ask for one document, while a bank asks for five. One institution might require weekly repayments while another requires monthly. Read the FAQs, surf the forums, watch tutorials, speak to those who have experience applying for a loan – do the necessary groundwork to ensure you are aware of the entire process for taking a loan, from application to repayment.
Just like any financial institution, Monexo has its own processes to facilitate a secure marketplace for borrowing and lending, while offering favorable interest rates for borrowers based on credit history. Read our detailed Borrowers FAQ section to stay aware of all that comes with taking a P2P loan on the Monexo platform.
2 – Know your credit score
Most conventional loan screening processes assess any prospective borrower’s credit score. You might say you’re good for the money and be telling the truth, but unless your credit score reflects that it will be difficult to convince anyone to lend to you. It’s easy to make a late payment or forget to pay off a credit card bill entirely, but what might seem like a negligible mistake could come back to haunt you. In many cases, you will flat out be denied a loan and if you do qualify for one with a less than stellar credit bureau report, you will be hit with higher interest rates to take into account your perceived higher risk of default. Keep a calendar of your payment deadlines and set aside enough cash to pay off your debts in full. Make a concerted effort to stay on top of your financial obligations and solidify your credit score before applying for a loan.
Every loan application received by Monexo is screened and given a Monexo Rating.
3 – Be Descriptive
Most lenders will be more trusting if you paint a clear picture of yourself. Be transparent about your income and spending habits. Explain the purpose of your loan application – a lender will feel more secure about repayment if the borrower is a man looking to pay for his child’s education, rather than another looking to spend sporadically in alternative investments. Be confident and matter-of-fact. Let the lender see that you have a firm head on your shoulders.