08 Dec How Seasonal Income Affects Loan Approval
Seasonal income is common in South Africa, leading many consumers to wonder how this will affect their loan application. At Loan Wave, our lenders are registered with the National Credit Regulator (NCR). This means that we can approve loan applications after conducting an affordability check. By understanding your financial limitations, we can provide you with a loan you can manage.
If you earn an inconsistent salary depending on the time of the year, it could affect your loan application. Consider the best ways to improve your loan application success, and let our Loan Wave team provide the insight you need to make financially smart choices. So, let us dive into how seasonal income affects loan approval:
Less Consistency May Deter Lenders:
According to the National Credit Act (NCA), lenders must check your affordability before granting loan approval. If you are applying for a secure loan, you will be placing an asset as collateral, so you won’t need to prove your creditworthiness – here’s how secured and unsecured loans work in South Africa.
When checking affordability, we assess your income over a period of months. Large drops during certain months can make you appear high risk. If you are applying for a large loan, it might be harder to qualify. We need to make sure you can afford the repayments, even during tougher months. It is better to apply for a smaller personal loan that you can easily manage.
A Good Credit Report Can Help:
If you have a strong credit report, with accounts paid on time and low balances on credit cards, this can count in your favour. Even if your income fluctuates, your credit score can offset that, and we will also consider the length of your credit history, possibly by assessing bank statements over 6 – 12 months. Consistency is important when it comes to honouring loan repayments, for anything from medical loans to payday loans.
Budgeting Strengthens Your Application:
We will look at how you manage your finances. If we find that you manage your finances well, it can make a big difference in the outcome of your loan application. Does your account go into overdraft unnecessarily? Do debit orders bounce regularly? Do you save during your peak earning months? These are all factors we will consider before approving your loan if you earn a seasonal income.
Are you ready to apply for a loan? Our team of trusted lenders will work with you to find the best loan for your circumstances and affordability. We are here to empower you with loans that make a positive difference in your life. APPLY NOW and look forward to a simple loan approval process and relief from financial experts.