Applying for a personal loan: everything I need to know
A personal loan application is a very common process nowadays. Life takes many turns, and at any moment an unforeseen event can arise, and we don’t always have the necessary liquidity to deal with it.
So, what exactly is a personal loan application?
A personal loan application is the contract for a credit product, which provides financing, with a preset interest rate and repayment schedule, to acquire a good or service, with imminent urgency.
Any person of legal age and legal resident in the country may apply for a personal loan.
To obtain it, however, it is necessary to demonstrate that this sum can be repaid with interest, within the terms established in the contract.
This repayment capacity is called creditworthiness and is evaluated by the lender before granting the loan.
The evaluation can take a long time, but when an emergency arises, this valuable resource is not always available.
In such cases, Magik Loans offers no credit check loans. Under unforeseen circumstances, we can always count on this quick and easy to apply for service.
Below, we will explain, in a concise manner, everything you need to know in order to make a personal credit application.
How does the personal loan application process work?
At Magik Loans, the process is designed to solve your unforeseen situation in just a few moments. All you have to do is log on to the website and fill out the registration form.
A few minutes later you will receive a response of the credit approval and then the reference number of the successfully executed transaction to your bank account.
What should a personal loan contract contain?
The personal loan contract must be in writing and contain a number of mandatory information, including:
- The indication of the amount and the modalities under which it will be disbursed.
- The interest rate
- The annual percentage rate of charge.
- Any modalities for changing the cost of the contract.
- Any extra costs to be incurred.
- The amount of the installments and their due dates.
- Indication of the guarantees and insurance
You should keep in mind that, the financial institution granting the loan, could unilaterally modify the conditions established in the contract, with the exception of the interest rate.
But only if this possibility has been foreseen in the contract from the beginning, with express signature by the client and if there is a justified reason.
Therefore, before signing the contract, it is advisable to verify the content and each of its clauses carefully.
In what cases is the personal loan application rejected?
In order to evaluate the creditworthiness of the applicant, financial institutions have privileged access to some private databases.
According to current legislation, before an applicant is registered in one of these databases, he/she must be informed and must have given written authorization to the financial institution.
Generally, the authorization to consult the databases is entered in the contract and agreed to by the applicant when signing it.
In case the loan is not granted, the denying institution must inform the subject of the reason, with particular reference to the negative information in a database.
The personal loan application may be rejected for these reasons:
It happens when the documentation shows insufficient creditworthiness of the applicant.
Previous credit commitments
When the applicant has other loan agreements in force that, in addition to the requested loan, would imply an excessive commitment for the client, and, therefore, the risk of incurring repayment difficulties.
The application may also be denied if the applicant has suffered protests in the past, or there is evidence of delays or defaults on previously obtained loans.
The personal loan is a form of financing to individuals, for emergencies and unique cases.
With this credit product, the client receives a sum of money, committing to repay it in installments, within a predetermined and reasonable period of time.
You should know that against the granting of the loan, fixed or variable interests are foreseen, and the payment of expenses during the amortization period.
It is a good idea to carefully evaluate the new debt you are about to take on, within the context of your family spending budget and your monthly income.
Consider both the total cost of the loan and the monthly payment you will incur. Remember that the monthly payment will be in addition to other monthly payment commitments, such as rent, utility bills, other loan payments, among others.
We hope you found this information useful and don’t forget that, in case of contingencies, Magik Loans will always be there for you.