Tag: loans Ireland

Online borrowing is not a new concept, and it is a more convenient method than traditional borrowing. If you want to apply for a loan, whether short term or long term, the first step you need to do is fill up the application form online.

It seems easy to apply for a loan online because you have to fill up your personal details and submit income documents so your lender can decide the disbursal limit subject to your affordability.

Most of the lenders advertise their loan products as “2-minute application”, and many of you take it as “disbursal in 2 minutes”. However, this term means it takes a couple of minutes to fill up the form online.

Whether you are applying for short term loans in Ireland or long-term loans, a lender will check your credit score. According to FCA guidelines, a lender must check a credit report before approving the application unless it is subject to a loan that requires no credit check.

In most of the short-term loans, lenders will not ask you questions about your repayment and the purpose of the loan, but they will do if you are borrowing a significant amount of money. Here are the questions that a lender will likely ask you when you put in the loan application.

How will you use that money?

A lender will not ask you this question if you are applying for a short-term loan, but when you apply for a business loan, they will get to know the answer to this question. You cannot get a loan by simply saying you need it to increase working capital or you want to buy equipment.

A lender would want to know how that money would contribute growth to your business. They would like to get this money back and therefore try to see if it is a sensible borrowing.

If you say that you are borrowing to repay other debts, you will have your application turned down right away. Make sure that you have a convincing answer to this question, so you get money successfully.

How will you repay the loan?

As this is not your own money, you will have to pay it back to the lender. Before transferring money to your bank account, a lender will show interest in knowing how you will repay.

Affordability is the essential factor that every lender has to consider to ensure that you do not fall behind repayments.

They want to assure that you have enough income to repay the debt. Since unsecured small loans carry a higher interest rate, it becomes more crucial that you do not borrow more than your affordability.

You have to tell your lender how easily you can repay your debt. Remember that if you point at your savings, the lender will not approve your application because savings cannot be considered a part of income.

By asking this question, the lender wants to know how likely you can repay the loan despite the ups and downs of the business.

Can you submit the collateral?

As long as you are borrowing a small amount of money, the lender will not ask you to put collateral. If the borrowing amount is more than £5,000, your lender can ask you to secure it. Sometimes, lenders can do it when they suspect that your financial condition is not that secure.

If you put collateral, you can qualify for a loan with a lower interest rate. If you do not want to place collateral, you can arrange a guarantor. Lenders seek such alternatives to mitigate the risk associated with your application.

By arranging a guarantor, you do not tie the risk to a particular asset, and therefore, you do not need to fear it. However, note that your lender will call upon the guarantor in case you fail to repay your debt.

A lender will always look over your affordability before approving your loan application. They generally do not ask how you will use the money. Still, when the borrowing amount is of a considerable size, they will likely ask you questions mentioned above to ensure your affordability. Make sure that you have convincing answers to these questions to get the loan approved successfully.  

Finance is a term that all of us have heard at least once in our lives, yet its true meaning is still aloof to us.

Finance relates everything that money can relate to.

For instance,

If money brings luxuries in our lives, finance will be involved.

If money is able to fulfil our needs and wants, finance will be involved.

If money makes us competent enough to deal with uncertainties, finance will have a role to play in that as well.

Finance is term that involves money coming into your pocket and leaving your pocket, with the inclusion of everything it can do between these two occasions.

When the word personal is attached to finance, it only involves the money practices that surround your personal life.

You might think that I am being too broad in my explanation, I might be because there isn’t a proper way to explain this notion, it is that grand.

However, I can try to make my explanation clearer, it would involve three examples.

The Prosperities

When do you say that you are prospering?

What is that one occasion that makes to believe that you are truly flourishing?

Is there a meter that can measure the scale at which we are thriving?

The answers to all these three questions are going to be ambiguous. However, there is one thing that is going to be the same in all of these and that is your financial health being sound.

When you have more than enough in your bank balance to fulfil your needs and still have plenty left to cater to your desires that is when you can say you are prospering.

For instance,

If I have to buy an iPhone 11, which would cost around €1,000, and I can buy that phone without putting any unwanted strain on my bank account.

This would be the occasion that will equate to me flourishing. And my financial management practices will provide me the means to do just that.

The Necessities

There are a lot of things in life that are absolutely necessary for our survival.

Having food on our table three times a day;

Having a roof over our heads, that we can call our home;

And wearing nice and clean clothes every day;

Apart from these three, everything else that we have can be lived without. That is not to say that everything else is redundant.

Owning a car, a TV, a Smart Phone and even a nice watch can also be deemed as necessities. Anything that aids us in our day-to-day life is important and a necessity.

Therefore, providing for the necessities is our paramount objective when deciding a budget.

A person who can easily provide for the basic needs has good money management skills, while someone who has to stretch every last penny on just the utilities is definitely doing something every wrong.

The Accidents

You must have heard the phrase “life is uncertain” too many times in your life. I cannot even count how many times my parents have told me this.

Have you ever wondered why we are told this time and time again?

The answer lies in finance management. Whoever tells us that life is unpredictable does so with the intention that we make ourselves prepared for the uncertainties through money.

I will tell you a personal incident.

I was mobbed a few years ago; they took my bag, my money, my jewellery and beat me to a pulp. I was barely an intern then, I already a student debt hanging over my head, and with no insurance I was overwhelmed with the exorbitant hospital bill that would land on my lap as soon as I was discharged.

Do you see what is wrong with the situation?

Instead of worrying about my health and the two cracked ribs that I had, I was worrying about the financial consequences of being mobbed. That is what is wrong with this scenario.

If I had indulged in financial management practices, I would only have concentrated on my health.  I had taken online loans that are easily available in Ireland and things did work out in the end, but the repayment was another disaster that I had to endure.

Winding Up

In the end, I want to tell a few very important financial management practices.

• Always focus on saving, because savings help in dealing with the uncertainties of life with only one focus.
  
  
• Always make a budget that will let you know how much deficit you will have or how much surplus you will have. This is important to have a clearer picture of your finances.
  
  
•  And finally, if you can, try to find ways to grow your money. Find a better paying job, work on a side business, invest in shares or mutual funds, but try to grow your money.

Just implementing these three can make your world seen a lot more enjoyable, a lot more carefree and a lot more enjoyable.