Loans are risk-adverse financial endeavours, especially with respect to the lender. The most favourable applicants have stable incomes, assets, a positive credit score and history and haven’t endured financial hardships like bankruptcy or debt consolidation.
If you’ve experienced financial complications, you could still be eligible for a loan whether it’s to buy a home, start a business or to improve cash flow. Here are a few tips if you are applying for a loan following some financial hardships.
Credit History vs. Credit Future
Lenders use credit score and history to get an idea of how you’ve managed previous and outstanding debts. A credit score is the most comprehensive way for a lender to learn what kind of borrower you are.
Apply for your credit score and if it’s low, then take a few months to improve it. This means paying your bills on time, trying to completely pay off a few debts and considering options like consolidation if it can improve your situation.
Assets
Financial hardships can stem from losing a job, switching careers, paying for post-secondary education or from unforeseen medical expenses. While hardships can make a dent in your present and future finances, it doesn’t mean you are a bad candidate for a loan.
If you have assets (property, businesses, investments, etc.), then they could outweigh any financial issues you might be facing. Don’t assume you will be denied a loan.
Loans to Handle Financial Hardships
A loan can help a borrower weather the financial hardships they might be experiencing. There are loans specifically geared towards increasing cash flow or repaying large debt loads. It’s not a bad option to consider a loan for this reason. A lender could be more willing to approve a loan for this reason as oppose to others like buying a property.
Every situation is different. Speak with a lender and let them guide you as to your available options and might be your best course of action. Contact us today and we’d be happy to answer your questions.
