Top Tips for Getting Your Loan Approved
Are you thinking of taking out a loan? Well, once you’ve done your homework you can get down to applying for one. However, you need to be careful: all the inquiries you make to take out credit will show up on your credit report, and while it won’t damage your credit score significantly, it could serve as a ‘warning sign’ for lenders who might wonder why you’re considering getting so much credit! So, make as few applications as possible, and maximise your chances of getting one single loan application approved with these top tips…
Don’t ask to borrow more than you actually need
This is one of the most important factors when it comes to getting your loan approved, which is why we’re listing it first. Only ask to borrow as much as you actually need, and make sure that you don’t accidentally over or under report how much your income is. Exaggerating what you earn can get you in real trouble with the law, as well as just setting you up for failure when it comes to repaying a loan.
Make sure the loan is actually affordable for you
Also, only take out a loan you know you can afford to repay. This might sound like an obvious thing to point out, but when you’re in financial difficulty it can be hard to think straight, and it becomes tempting to say yes to almost any offer of cash. The Money Advice Service has a calculator you can use to check that you can actually afford the loan you’re applying for. It’s a good idea to input the numbers and see what it shows, as it could be the difference between managing debt in a way that’s healthy, compared to being lumbered ever-increasing money worries.
Check for errors in your credit report
Your credit report details your history of borrowing and repaying (whether it be your phone contract, a car you bought on finance or a mortgage, for instance), and it’s something that credit lenders will look at when deciding whether or not to grant you a loan. Ask to view your report from a few different sources. Then, check for errors in it and notifying the necessary people if there are any areas that need updating. Doing this will increase your chances of being approved for credit, as it helps your score and ensures that things match up as they ought to!
Go to the right lender
Finally, you’re more likely to get approved for a loan if you approach an appropriate lender. So, if you want to take out a loan to buy a car, consider approaching a lender that specialises in car loans. Alternatively, if you want a loan to do some DIY improvements to your house, consider approaching your bank or building society – especially if you already have a mortgage with them. Just be careful to only approach a reputable, responsible lender: you don’t want to borrow money from someone who’s going to charge you a really high amount of interest or has a reputation for treating borrowers badly.