Did you know that in the UK, over 90% of loan requests are declined? That means that only 10% or less of loan applications get accepted.
But why is that? Is there something that borrowers could be doing better? Are the lenders particularly picky? How competitive is the loan market in the UK?
Factors that affect your chances of getting a loan
It’s hard getting a loan. Anybody who has gone through the process knows this. Sure, it might not be that difficult to get a loan if you’re rich and famous, but we small guys have to jump through hoops to get a bank or lender to look at our applications. At Family Money, you can get the help and guidance needed to secure a loan. One of the most common questions is, “What are the factors that affect my chances of getting a loan?”
Lenders look at several factors when deciding whether to lend money to people. These include your credit history, income history, and property status. The types of loans available also depend on the type of property you have and whether you are paying off your debt or have a working credit history. Some lenders will only consider customers with bad credit, while others will only consider customers who have been less than 60 days late on their payments. Lenders also look at historical data on your creditworthiness and credit history, and they’ll even look at your recent purchases and balance-to-income ratio.
Loan amounts, filing fees, and funding conditions can affect your chances of getting a loan. Make sure to read the fine print before applying for a loan, and be aware of potential financing offers and interest rates. Apply for most loans in writing, but some lenders may consider oral or telephone applications, particularly if you have a serious health issue or financial problem that prevents you from proving financial responsibility.
Improve your chances of getting a loan
Having the proper documents with you is crucial. Will you get the loan on the same day? Or take a day or two? It depends on many factors, but here are some tips that will help you improve your chances of getting a loan approved in no time.
Lenders will evaluate you based on information provided by your lender, so you must give as much information as possible when you apply. This includes providing copies of resumes, current and previous payslips, existing housing and employment documentation, and other documents that would be relevant to the application process.
Maintain your credit score
Maintaining a healthy credit score is essential in the continuous process of securing financing. It is just as important to keep things running smoothly as it is to start building your credit score. There are many ways you can approach your credit score, but many people who have experienced setbacks become obsessed with ways to improve their score alone.
Keep your credit score high by making regular payments on time and in full on credit cards available for use. Pay off debts quickly by paying off balance less regularly than the average person does. Pay off your debts by adding on new debts as you earn income. This debt repayment method works very well for people who have a little credit history or have had problems with it in the past.
Get some references for potential lenders
Have you ever applied for a loan without any assurance that you will receive it? Usually, it is challenging to stand just on your own merits. Unfortunately, this is a reality for many people today, so they end up taking on loans from unregulated lenders. However, a potential borrower wants to be sure they get the money as soon as possible. What if you can get references from lenders who are familiar with the type of loan you need?
How to get your credit score up
It’s a no brainer that having a good credit score will improve your chances of securing a personal loan. Have you ever wondered how to get your credit score up? The secret is the credit score works in mysterious ways. Your credit score is not an easy concept. Many factors go into credit scores.
Getting your score up can be as easy as signing up for a new card with your existing provider. Or it can be as hard as working hard to get your score up. If you’re struggling to get a new credit card but want the benefits of one with better rewards such as bonus miles or cashback on top of the sign-up bonus, contact your current provider and explain your situation. Some small companies will be willing to work with you on improving your score. Others will push back if you’re anxious or in debt already.