Never Had a Loan? Here’s an 101

A lot of people have the impression that only those with a good credit rating can get approved for a loan. Truth be told, even if you have never had a single personal loan in your life, you can get one. There’s always the first time, sure. However, with your squeaky clean record, it means more than that.

Banks and other forms of lenders actually want first time debtors. They’re likely to offer you credit even with your inexperienced record. Why? Because you have one thing that differentiates you from savvy debtors- bad credit rating. Your clean record makes you far from a bad risk so you’ll likely get a personal loan faster.

All you need are the following:

Strong employment record. But not just any job though. You need to be employed with a reputable company. As a first time debtor, your employment is proof that you have a steady and substantial income. This gives lenders the impression that repaying your loan will be an easy task.

Assets. If you have invested in valuable assets, guaranteed it’s a high point for you. As a first time debtor, you may be allowed for secured personal loans initially. You will need a security pledge for this. Your assets will be a good one. If you pay off your loan on time, you’ll be free from the pledge. More importantly, your credit line will increase. So when you next apply for a loan, a security pledge may not be necessary.

Savings. Your savings is also a great support for your first loan. If you have a significant amount of savings, it guarantees lenders that you have the means to pay. But of course, if you have an income, it’s much better to use that than a slice of your savings. In the future, when you decide to get a bigger amount of loan, you can pool your assets, savings and income as guarantee.

When you do get approved for a loan, make sure to repay on time. Additionally, try to pay in full and within the shortest time possible. First, paying on time will leave your credit history free of negative scores. In time, it’ll allow you for a higher credit line. Second, paying in full in the shortest time possible will help you avoid getting into debt.

It is important to know that being a first-time debtor is your advantage. However, you can only use that privilege once. Once you’ve had your very first loan, there’s no turning back. You must do all you can to always be a ‘good’ risk for lenders. If not, you’ll be begging to be approved even for bad personal loans.