The coronavirus outbreak had made a lot of individuals cash-trapped. The good thing is, personal loans are always to the rescue. This unsecured loan is the most sought-after funding whenever financing emergencies tend to shoot up.

However, while the application process is often quick and easy, there are instances when certain mishaps, usually due to clumsiness from the distress to seek credit, are overlooked. This will more likely cause your application to be denied. You can suffer from costly mistakes, as well.

You have to be a smart personal loan applicant. For an end-to-end smooth application process, it’s best to know the common pitfalls that other applicants tend to do during their application and learn from them. Here are four don’ts that you should avoid at all costs.

Applying to Various Lenders at Once

We understand that you’re gravely in need of funds. Since you currently have immediate needs, chances are you might end up applying for several personal loans from various lenders—but don’t. A hard pull or hard inquiry is typically reflected on your credit report every time a lender processes your application.

What’s wrong with a hard pull? If there are multiple hard inquiries reflected on your credit report at once, it could severely hurt your credit rating. Other lenders consider applicants with several hard pulls as “credit hungry” and might consequently deny their application. Hence,  make sure to be “credit savvy” and space out your credit applications.

Forgetting to Check Credit Score Always

Not knowing your credit score before applying for a personal loan or even other credit facilities is a huge misstep! There are no issues if you have a great credit rating. Instead, there are more advantages, as follows:

  • Preferential interest rates
  • Tenure flexibility
  • Waivers on fees such as processing charges
  • Faster approval rate

On the contrary, having poor credit scores translates to lower approval rates or higher interest rates. Hence, if you have a poor credit score, there’s a need to work it out before applying for a loan. Make sure to clear all your remaining dues. Also, see to it that your credit report has no errors. If there are, call your bank to get the errors corrected right away.

All of these repayments (if financially unstable) and rectifications take time. It will be time-efficient if you know your credit rating in advance before applying for a personal loan. Most online lenders, such as that of CreditNinja’s website, provide “check your eligibility” features on their platforms. Hence, online inquiries are just one click away.

Overlooking Requirements

After knowing your credit score, check the lenders’ requirements. Credit requirements, income requirements, and employment requirements are the main factors that contribute to the faster approval of unsecured personal loans. Every requirement has its respective minimum that applicants must meet to qualify for the said loan.

Not meeting a lender’s requirements means you’ll be more likely rejected outright, regardless of how great your credit score is. Inquire about the lender’s requirements first before the lender processes your application.

Check the lender’s minimum income requirement, as well. Typically, it isn’t often listed on a lender’s website. You have to either browse the lender’s review pages, mail the lender, or directly connect to lenders’ hotline. We have to do this digging to make sure we can afford to pay back the intended requested loan in the future (more of this later).

More importantly, know the lender’s employment requirement. Freelancers, beneficiaries, and receivers of child support payments aren’t eligible for personal loans sometimes. Most lenders grant applicants who are employees of a certain company or who are receiving salaries through direct deposit.

In a nutshell, you’ll have to know your credit score and the lender’s requirements first. It will be your loss if you don’t meet the lender’s requirement and get denied, yet the lender has already made a hard pull in your credit report.

Ignoring your Repayment Capacities

Many desperate applicants tend to apply for bigger loans than their requirements and ignore their repayment capacities. Qualifying for loans of large ticket sizes does not mean availing the loan in full.

A bigger loan translates to a higher repayment. Bigger repayment also means more financial burden during the loan tenure. What’s worse, longer tenure means a higher interest rate.

Considering the current pandemic, especially if you’re currently unemployed, see to it that you have complete clarity on your financial needs and capabilities. You have to ensure how much money you exactly need and how much funds you’re able to repay without hindering other financial commitments you have in the future. Then, only apply for that specific amount needed and not a penny more.


In a dire situation, don’t forget to act smart. A personal loan consists of several charges, including charges on late payments and tenure extension. There are fees you have to pay when you decide to pre-close the loan or swap lenders. Moreover, document requirements differ from self-employed and non-salary employees. As such, always read the fine print.