Magical Credit Blog

The personal loan application process can be nerve-wracking. There are many factors and variables that a lender considers before making an approval decision. However, there are times when the lender may decide to reject a loan application, as well. While that can be highly discouraging or disheartening, it doesn’t necessarily mean that it’s the end of the road for your personal loan ambitions.

In this article, we go over some of the main reasons that banks choose to reject an applicant, and some of the proactive actions you can take to avoid this fate.

Personal loans are debt resolution solutions offered by lenders to individual consumers. Unlike a mortgage or auto loan, these loans do not have to be used solely for a specific, defined purpose. Once you are approved, you have discretion over how you utilize the funds.

Although personal loans come in many shapes and sizes, the general definition of a personal loan is a credit loan offered by a lender to an individual borrower. Most personal loans are provided as a lump sum and the principal has to be paid back with interest over time in regular intervals (usually monthly or biweekly). Some personal loans are also offered as revolving credit, wherein the customer has a maximum credit limit and can borrow, repay, and borrow again up to that maximum amount.

If you are currently on the cusp of retirement, or are contemplating it within the next few years, it is only natural to assess your finances and start planning ahead for life after work. In Canada, there is no official retirement age. However, the average retiree is aged around 65. To qualify for a pension from the Canada Pension Plan (CPP), you need to be aged at least 60 and have made a minimum of one valid contribution while you were working.

Inflation is a percentage figure used to describe a general rise in the prices of goods and services that we purchase. It is measured on a ‘basket’ of a select group of goods and services based on the consumption patterns of the average household in an economy. For example, if a particular basket cost $100 in Year 1 and the same basket cost $103 in Year 2, inflation is measured as 3%.

A credit report is a document that summarizes your credit history with borrowed funds (such as loans), bill payments, and other forms of credit. Your credit report begins from the first time you borrow money or apply for facilities that grant you access to a line of credit, such as a credit card. Lenders then send this information and subsequent data on your payments to institutions known as credit agencies, which use that information to create and update your credit report, and assign you a credit score. In Canada, Equifax and TransUnion are the two major credit agencies.

What Is an Emergency Fund, and How Does It Work? An emergency fund is a backup plan for your finances in case you ever experience setbacks that cost a sizable sum of money, or hinder your ability to earn more in the near term. Read More