When you apply for a personal loan, it’s important to be open with the lender and tell them exactly what the loan is for. In most cases this won’t affect the success of your application, and it protects you from problems further down the line.
Personal loans are taken out for many different reasons - from wedding expenses to paying for a special holiday – but if you’re not honest on the application you run the risk of the loan being called in at a later date.
What are the common reasons for taking out personal loans?
- Home improvements
- Wedding costs
- Car purchase
- Special holidays
- Emergency expenses, such as unexpected damage to your home
- Consolidating other loans or debts
Consolidating existing debts, such as those on your credit cards and store cards, can be a good idea in many cases but it’s advisable to seek professional advice on this before applying.
Scotland Debt Solutions specialises in helping Scottish people to escape debt, and can let you know whether it’s the best option in your circ*mstances.
Are there any instances where the bank won’t lend money?
There are certain reasons for a personal loan application that won’t be accepted by a lender. These include, but are not limited to:
- Gambling
- Any illegal activities
- Investing, such as in property – you’ll need to take out a mortgage for this
- A down payment on another loan
- Student tuition fees – it’s unlikely the bank will grant a personal loan for this reason as student loans are set up specifically for this purpose and offer important advantages
If you’re not completely truthful with the bank on your personal loan application, it can have serious consequences if they later discover that you’ve been dishonest. They’re likely to demand the outstanding amount in full, which could leave you at risk of serious financial difficulty if you can’t repay.
What are the benefits of taking out a personal loan?
- Fixed monthly repayments and a fixed loan term makes budgeting easier - you know exactly how much you need to pay each month, and for how long
- Personal loans are an inexpensive way to borrow when compared with the interest rates charged by credit card companies
- Paying off a personal loan on time and in full each month improves your credit score, and shows you can deal with debt responsibly
A personal loan offers several benefits depending on your circ*mstances, and although you’re taking out more borrowing it can sometimes help you deal with a difficult financial situation by regulating repayment and helping you budget.
If you’re considering applying for a personal loan, our experts at Scotland Debt Solutions can help. We specialise in helping Scottish residents out of debt and can provide the reliable advice you need. Please contact one of our experts - we offer free same-day meetings at our network of offices around Scotland.
