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When applying for a personal loan, it's important to maximise your chances of approval wherever possible. Getting approved can be easy when you know how (though some people might still find it easier than others). It's important to remember that loan rejections show up on your credit file. This can be red flag to lenders and decrease your chances of approval the next time you apply. If you want to increase your chances of getting approved for a personal loan, this guide to easy approval tips could help.
There are a number of factors that lenders look at when determining whether or not someone is eligible for a personal loan. The following are the factors that lenders consider and how to improve your chances in each:
Personal loan lenders will look at your credit score and history for any past defaults to determine how risky you will be as a borrower. Having a strong credit history with no defaults will make it easier to be approved for a loan. You can check your credit score for free and if you find it wanting, there are some steps you can take to improve it prior to submitting a loan application.
Most lenders will usually have a minimum income requirement to determine whether someone will be able to repay the loan. This is a responsible lending technique. If your credit history isn't perfect but your income is reasonably high, you may still qualify for a personal loan (although you should probably discuss this with the lender directly prior to submitting an application). If your income doesn't meet the minimum requirement, that particular loan is probably not appropriate for your circumstances, as the repayments will likely be too high. Try applying for less, or considering a joint personal loan.
Some loans require a loan security in the form of an asset or home equity. Other loans are unsecured and some make offering security optional. Sometimes offering an asset as security can increase your chances of approval on a certain loan - particularly if your credit history isn't perfect - as it presents less risk to the lender. Be sure that the asset offered as security meet the eligibility criteria set out by the lender. It will be required to have a value either equal to or more than the loan's value.
What are you going to do with the funds you're applying for? Some loans come with restrictions as to what the funds can be used for. For example, secured car loans usually have restrictions on the age of the car. Other loans may prohibit using funds to pay bills or other debts. It's important to check the eligibility criteria of the loan and make sure that you can use it for what you need it for before applying.
Lenders verify the information and details that you put in your application. Therefore, if they find inconsistencies, they may reject you. Be vigilant and make sure that you always tell the truth.
A lender will look into any other debts that you are currently holding. If there are too many, they may find cause to reject your application. If your need for a loan isn't pressing and you still have other outstanding debts, it might be worth taking the time to pay some of them off before applying for more finance. This will make it easier to get your application approved when you do make one. It will also make another loan easier on your finances.
Getting your personal loan approved should not be a hassle or a nightmare. Applicants can do the following to improve their chances:
We've included some factors that you should consider when making your comparisons between different lenders before submitting an application:
With some loans, you can apply online and get approved instantly as long as you have a good credit rating and can provide proof of income. There are many lenders offering instant cash online within less than 24 hours. This allows you to access quick cash without having to wait for long periods before being approved. If you need a loan quickly, it might make more sense to go for a lender with a straightforward and quick approval period. Just make sure that you meet the eligibility criteria.
Depending on your preferences and availability of collateral, you can opt for an unsecured or a secured loan. With a secured easy approval loan you are required to pledge collateral against your loan as security in case you are unable to pay. Collateral could be a property deed, a guarantor or even the item you wish to use the money to finance. An unsecured loan does not require you to provide any security, but your credit rating has to be good due to the extra risk the lender takes on.
Personal loan lenders usually personalise their rates depending on the financial circumstances and credit histories of the borrower. Factors such as asset ownership may also be taken into account. A lender's advertised rate is usually the lowest rate that that particular lender offers. Qualification for this rate may come with strict criteria and require an excellent credit score and high income. Shop around for a competitive rate and if your credit rating isn't perfect, perhaps take some steps to improve it before applying.
All loan applicants will be subject to the eligibility criteria set out by the individual lender. It is important to read this carefully prior to submitting an application in order to determine whether you are eligible. It is also important to consider the costs and decide whether you can afford the loan comfortably. Basic eligibility criteria for personal loans requires applicants to:
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Is it alright if I borrow ..
Hi Emma,
Thanks for your enquiry.
Please note that lenders have different eligibility criteria for personal loans, but ultimately they will assess your ability to service the loan with your income sources.
If you’d like to apply for one of the above personal loans, simply click ‘go to site’ and you’ll be redirected to the application page where you can complete the process online.
Thanks,
Belinda