Category: Loans

Can Young People Get Loans?

If you are young person then you may be concerned that you will not be able to borrow money. You may have heard about other young people being refused loans or you may just wonder whether you will be able to get one. You may have even tried and been turned down. It is worth considering before you apply as if you get turned down when you apply for a loan then this could be a negative towards your credit rating so you may be worried about this.

Firstly, it is wise to decide whether you really need a loan. If you have savings or can wait and save up for the things that you need then this could be the best way to do things. It will be a lot cheaper anyway and you will not need to think about whether you can get a loan or not.

The type of loan that you are applying for could determine whether your age will have an effect or not. It is likely that this will depend on the type of loan that you are applying for. Some lenders will be interested in your income and will want to see that you are in permanent employment and have been for some time. This will show that you have a regular income and have the means to make regular loan repayments. This will be more necessary for the larger value loans and mortgages but is still important anyway as if you apply for a loan you will need to make sure that you will be able to pay it back. If you are younger you are more likely to be in a lower income job and therefore this could be a reason for you being turned down for some loans.

Many lenders will also take a look at your credit record. This is often not so good when you are younger, just because you have never borrowed money or had to make regular payments. Having had a loan and paid it back will show that you are capable of doing so and therefore you are more likely to be considered for another.

However, if you have borrowed money and not paid it back on time then this will have the reverse effect and work against you. As many younger people have not borrowed money then other things will be considered. This could be paying of bills, such as a mobile phone, utilities etc. If you have always paid on time this will work in your favour; if you have missed payments, then this will work against you. Having some records showing that you are capable of paying bills, will really work in your favour. This means that if you keep on top of paying for everything, then this can help you to improve your credit rating and therefore be more likely to be leant money.

Some people try things to make their credit record better. It can be worth taking a look at your credit record, to see what it shows and whether it is correct. You can do this free of charge and it is important to make sure that information on it is accurate and therefore shows you in a good light. If anything is incorrect, make sure that you get it changed so that you have a better record. If you have not many things on it, then you may want to try to improve it. There are some lenders that try to encourage you to get loans so that you improve it, but these are often very expenisve. You may be able to find other ways to improve it, such as having your name on a bill that is paid regularly or getting a credit card that you pay off in full each month. You do need to be careful though. As if you take on debt in order to improve you record, it may not only take time to have an effect, it could also lead you to overspending and paying out a lot in costs. It may not be worth it, so think it through really hard before you try anything.

So often age is not a specific problem when it comes to borrowing, but there are other factors that might influence a lender which could be indirectly related to your age. A lender will want to see that you have a good income and a steady job so that you have the means available to repay any money that they lend to you. They will also be interested in your credit record. Therefore if you can show that you are capable of making bill payments on time and any other regular payments that you have to make, it will show that you are capable of repaying other loans as well.