How to Improve Your Chances of Getting a Loan

3 million people using high cost credit in the UK every year, there is always a consistent demand for loans. However, both the high street and online lenders cannot accept everyone – they will typically have a limit on the number of people they can lend to and want to grant funds to those that can afford to repay them. To avoid possible rejection and maximise your chances of approval, we highlight some of the key points here.

Finding The Right Company

Borrowers can waste a lot of time going through comparison sites and brokers looking for the right loan for them. Comparisons offer a useful way to compare the overall cost of a loan and get an idea of the market, whether you are looking at personal loans, business loans or credit cards.

Whilst there are several companies online that offer one single application, this can be detrimental as it may result in multiple credit searches on your file and a number of companies bombarding you with loan offers.

Ideally, you want to apply directly with the company, sometimes known as a payday loans direct lender, so you can avoid any middlemen and upfront fees.

Additionally, you want to ensure that the lender you apply with is authorised by the FCA and has a consumer credit license.

Meeting The Criteria

Whilst most lenders have a similar criterion of being a UK resident, in employment and above 18, some loan products have specific requirements and you may need to check these before applying. This includes being a homeowner, having a guarantor, not being unemployed, on benefits or on a pension.

Some lenders may request a recent payslip to prove employment and if you have recently left your job, this will not be applicable.

Good Credit Score

For several financial products, it is important for applicants to have a good credit score to be eligible. This is a reflection of your creditworthiness and shows how well you have repaid other types of loans and cards in the past and if you have a lot of debt outstanding. Lenders will be wary of any recent defaults or arrears and multiple applications in a short space of time.

In the event that you do not have a good credit score, you can still access finance by offering extra security through the use of a guarantor or securing your loan against a valuable asset such as a house, car or jewellery.

Provide Honest Information

One key thing to being approved for a loan is to provide honest and accurate information. It is very common for people to submit a higher salary or saying that they have lower monthly expenses to increase the amount they can borrow. But anything suspicious will raise flags to the lender and request further proof via a payslip or bank statement.

In addition, it is important to apply for you and not on behalf of someone else. This is because the loan always has to be for you and the information has to be accurate. This is another thing that might slow down your application and if a lender requests a phone call, they will want to speak to the main beneficiary.