Personal loan financing
During a long life, there will be scenes where you will run out of money. In some cases, you may consider borrowing from a bank or consumer finance. I am wondering if there is a reason for borrowing and whether that reason will affect the examination.
This article summarizes and details what is commonly said about the reasons for personal loans in Sydney. In many cases, the description of a card loan product, etc., states that the purpose of use is “free in principle” or “limited to livelihood expenses.”
Purpose for a personal loan
Livelihood expenses are the money you spend on shopping and utilities that you need to live your life. It does not matter if you spend it on anything related to daily life as it is clearly stated that there are prohibitions or restrictions on the use as project expenses.
In addition, filling for the purpose of gambling, investment, or repayment to other companies may not pass the examination. This is because it is easy to borrow a large amount of money and there is a risk that you will not be able to repay it.
When you apply for a card loan, your identity will be verified by phone. At that time, you may be asked the purpose of using the card along with personal information and work information. Why do you ask the reason for borrowing when the usage should be free in principle?
One is to determine if the person applying is really a person who can repay, or if they can use it with a prospect of repayment. Even if it says that it is free in principle, it is supposed to be used within the range of common sense. Without understanding it, it becomes difficult to lend to a person who declares an inappropriate purpose of use for borrowing.
The other is to make sure that the purpose of borrowing is not incidental. You may be forced to rely on consumer finance to borrow money in the face of fraud or intimidation. When borrowing with such a case, the reason for applying may be unnatural or the speech may be uncomfortable.
In addition, there are cases where it leads to financial troubles such as name lending, and there are cases where asking the reason for borrowing leads to clues to fraudulent use.
How are you investigating the reasons for borrowing?
In principle, the use of a card loan is free. In the case of borrowing, the financial institution is not actively investigating whether the reason is true. It is difficult to delineate where the reason for illegal borrowing is, and it costs a lot to check how each user spends their money.
However, the real reason is to repay the borrowing of another company, and if you apply for another reason, the financial institution may detect that.
Next, I will explain how it works when you find out that you have a loan from another company. Other companies’ borrowing and delinquency are known by credit information.
What is credit information?
Credit information is any information that is recorded in a credit information institution when dealing with a financial institution. The contents of credit information are diverse.
Credit information is recorded at any time by applying for or using a credit card or card loan and is stored in a credit information agency for a certain period of time. Critical information such as debt consolidation is also recorded in credit bureaus.
Factors that do not pass the examination other than “reason for borrowing”
As explained above, it is quite possible that the examination will not pass due to the main reason for borrowing. Then, are there any factors other than the reason for borrowing that does not pass the examination?
In reality, it is rare that the reason for borrowing alone determines whether or not to pass the examination. Judgment is made comprehensively, including other factors. In card loan screening, there are some factors that are generally said to prevent you from passing the screening.
One of such is long-term delinquency, desired borrowing amount, and the applicant’s own repayment ability. Let’s take a closer look at this factor.
Payment has been delayed for a long time in the past
A card loan is a financial service that allows you to borrow without collateral or a guarantor. Therefore, we focus only on the credit of the users themselves when making loans. As a result, long-term delinquency is seen as heavy and increases the likelihood of failing the review.
Payment status is important to credit information, and this status is shared by financial institutions through credit information institutions and updated from time to time.
Please be careful not to delay payment for a long period of time so that you will not be disadvantaged in the examination. Record of late payment history is always reflected upon before an examination on personal loans.