The amount of money lent to consumers has been increasing. A substantial amount of this money comes from banks and new mobile-first companies. In the United States, fintech companies helped propel loans to consumers to more than $138 billion in 2019. This trend is likely to continue as the period of low interest rates continue. A common thing about online loans, and other types of unsecured loans, is that the limit is usually very small. In this article, we will look at ways of increasing your loan limit.
Your Credit Score
Companies similar to https://www.fatcatloans.ca/, for example, that offer online loans, determine the amount of money to give you based on your credit score. A credit score is a number that is generated from credit bureaus. A credit bureau is a company that receives your transaction history from banks and other lenders. It then populates this information and comes up with a number. In the United States, credit bureaus take the information and give it to a credit scoring company like FICO. FICO then comes up with a number.
A higher credit score means that you have more ability to pay. A small number provides a sign that you will not be able to pay the money. Therefore, the best way of increasing the amount of money you can borrow is to improve your score. You can do this by paying back your debts on time.
Pay on Time
Another way of increasing your limit is to pay back the money you borrow on time. A common mistake that people make is to delay in paying the loan. Remember, this information is usually captured by credit bureaus. Therefore, ensure that you pay all of your outstanding loans. Online lenders do not penalize people for paying back loans early. Therefore, you should ensure that you pay back the money on time because this will help you be in good books with the lenders.
Don’t Overborrow
As mentioned above, lending companies have a way of knowing your financial record. Whenever you borrow, these lenders are presented with a dashboard of all your loans. In some countries, they also see your history of paying your bills. They look at your rent and mobile phone bill. Therefore, ensure that you borrow reasonably. Borrow money that you can afford to pay. By so doing, a lender will be comfortable to give you money.
A Relationship
The money you borrow tends to depend on the relationship you have with your lender. A company that you have a relationship with will be comfortable to lend you more money. This is one criteria that a company like Tunaiku Androidand Tunaiku iOSwill give you more money because they are sure that you will pay.
Final Thoughts
It often hurts when you see the maximum amount of money that a company can loan you. Following these tips will help you access more money faster. Some companies will also give you money at a lower interest rate because they are sure of your commitment to pay. Therefore, ensure that you have a good credit score and pay all your loans on time.
