Published On: Sat, Jan 19th, 2019

Thinking Smart 8 Powerful Tips & Tricks for Getting Approval for Your Loan

If you’re about to apply for a loan, you’re in the right place. While it used to be easy to borrow money before the global economic crisis, new financial regulations and a general risk-aversion from banks have made things a bit more difficult. Although you’ll no longer be able to get such cheap and easy credit – it’s still possible to get the right loan under the right circumstances.

loan approval tips

So if you’re looking to borrow some money, this article is for you. Whether you’ve recently been rejected or are getting ready to make your first application, hopefully, some of these tips will be enough to get you that money you need.

 

  1. Get a credit check

One of the most important factors in determining whether you’re a safe person to lend to or not is your credit rating. It’s the first thing many lenders will look at, and if you’ve got a bad one – you might not get any money. Thankfully, you can find out what’s on your credit file so that you know what lenders are seeing about you.

 

Sometimes, your credit rating could be low simply because you haven’t built up much of financial history. However, most of the time it’s because you’ve previously had some money management issues. This is a big red flag to lenders and could be a reason why you’re getting rejected. Banks and other loan companies don’t want to take a risk on someone who’s previously had bailiffs round or defaulted on a loan, or even missed a lot of payments. That’s the sort of thing that could be in your credit file, or might be affecting your overall credit rating negatively. Whether you’re looking for the same day loan or otherwise, a credit check could help.

 

  1. Improve your credit rating

Thankfully, if you do have a poor credit rating – all is not lost. There are still a number of different steps you can take to improve your rating and start getting accepted for loans. Firstly, if your credit rating is low simply because you haven’t built up much of a history with lenders – then build one. If you’ve never borrowed money before or used a credit card, then lenders can’t know how reliable you are. This sort of credit rating issue is normally quite straightforward to fix, although not necessarily fast. Simply take out a prepaid credit card, or a proper one if you can get accepted, and build a strong history of paying back regularly and never missing payments. This can help things get sorted reasonably easily.

If you’ve got more serious credit rating issues, things might be a bit harder – but it’s still possible to fix them.

Try closing all dormant accounts as this can look like poor money management. Pay more than the minimum on any loans you’ve already got. Don’t go overdrawn. Pay off some debts in their entirety and never miss a payment. There are loads more ways to help fix these credit issues, but hopefully, this advice has got your heading in the right direction.

 

  1. Provide as much information as possible

Lenders don’t want to take risks anymore. That means you’ll need to provide them with as much information as possible when you’re trying to get a new loan. That means bank statements that go back as far as possible and clearly show what you earn and spend. Provide all the right identity documents and proofs of address. If you’re missing any of these, it could lead to rejection.

 

  1. Provide collateral

The more collateral you can provide to a loan, the more likely you could be to get accepted, even if you’ve got a poor credit rating. If you’re willing to put up a $20,000 car as collateral for a $10,000 loan, this should be more than enough to convince lenders to go with you. Just make sure you keep up your payments or you could lose your vehicle.


 

  1. Make sure you’re earning enough

Lenders won’t lend to you if you haven’t got proof that you earn enough money each month to keep up with payments. And this is for your own good. Don’t try and trick a lender into accepting your application by falsifying what you earn – even if it works, it isn’t good financial sense. They don’t want to lend to you in this sort of situation because it’s too much of a risk to do so. So you shouldn’t want to put yourself in a risky position either.

 

  1. Shop around for the best offer

Don’t simply apply for the first loan offer you see, shop around. Ask each lender what their rates are and if they can offer you any discounts. If you don’t ask, you don’t get nor give it a try. Also, it’s a good idea not to keep applying for tons of new loans if you keep getting rejected – give it a slight break. Lenders see these rejections and it could put them off. That’s why it’s important to plan who you’re going to apply with care rather than just firing off loads of applications to different lenders.

 

  1. Compare online

There are loads of places online these days where you can compare all sorts of loans with each other. This gives you a great way to see who’s offering the best deals and how much you could save with one lender compared to another. Give them a try.

 

  1. Try specialist lenders

If you’ve got a specific need from your lender, then you might want to have a look and see if you’re covered. A mortgage is a special type of lending, but that isn’t the only one. There might be lenders in your area who specialize in people who’ve got poor credit ratings or who are low owners. You might also be able to find a lender that helps lend to people for specific types of purchases, like motorboat loan lenders. So have a look t see if you can make the most of a specialist lender.

Hopefully, these tips are enough to get you accepted for your next loan.

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