Loans can be an alternative way of getting rid of your financial struggles. At least, that’s what the majority of people think. But, is it easy to get approved on guaranteed loans for those with bad credit? If you haven’t yet applied for a loan, then it is important to know that getting approved can be a really incommodious task. Rejections are a regular occurrence when you apply for loans. When you try correcting any mistakes made on past applications, a new one that appears.
Getting rejected when you have urgent financial requirements can be one of the most irritating things when applying. So, this begs the question of, is there an easy way out of this problem? Unfortunately, there isn’t a magic wand that you can use to help you get approved. The only thing you can do is learn from your mistakes and make improvements during the application process. Here are 8 ways to ensure that you get approved on bad credit loans.
1. Have A Look at Your Credit History
It doesn’t matter where you are borrowing from, whether it’s a direct lender or a bank, your credit history and score is the key player that decides whether your application gets approved or not. Your history shows the lender how serious you are when paying off your debts and how well you manage your finances. So, if you have a poor credit history, then there is a high chance that any application you make will be rejected.
2. Make an Effort to Improve Your Credit Score
A bad credit score is not something that is welcomed by lenders. However, that doesn’t mean you cannot be accepted for a loan. There are many FinTech lenders who provide loans for people with bad credit; the interest rate is just higher than a standard loan. To be on the safer side, it is important to start improving your credit score in general.
3. Present Yourself as The Right Candidate
You will rarely get rejected by a prospective lender if you can show them why they should lend the money to you. One of the simplest yet effective ways of doing this is showing a lender proof of your income that will help you repay the amount of money being lent to you.
4. Have the Correct Documents
Rejections often occur when those seeking a loan don’t have the proper documentation with them. When applying for loans, you should always ask yourself “why would any lender agree to give me sums of money when I cannot even provide them with the proper legal documents?”. This is why it is essential to ensure you have the correct documents when applying for a loan.
5. Ask for A Sensible Amount of Money
If you have a monthly income of £1500 and looking to getting to get a loan for £150,000, then your application will be rejected instantly. These lenders are not stupid; they know who can and who cannot pay the amounts that they apply for. This is why it is important to apply for the amount that you know that you will be able to pay back in the near future.
6. Choose the Right Lender
If you are looking to get approved on the loan applications you make then selecting the right lender always plays an important factor. You can find lenders online and offline. However, be very careful when looking for loans online. There are plenty of online lenders promising loans with no credit check to people who have damaged or bad credit. While this option might sound ideal, it’s essential to be cautious, these websites may be nothing more than advance fee loan scams.
7. Be Certain About the Type of Loan You Want
During the application process, one thing you can be certain of is that the lender will ask you the reason for the application. Choosing a loan that best fits somebody requirement is the one that they should choose. If you choose a different kind of loan that’s away from what your needs are then it’s going to make the application process more cumbersome.
8. Attention to Detail
Your application is the first impression you make to a lender. It paints a picture of your profile and background, so it’s important that you paint it right. Applications that are incorrect or riddled with mistakes will only lead on to them being rejected. One of the most effective ways of making an application is providing details that are in their truest and honest form. Any false information that you include on your application will only increase the chances of it being rejected.
In the end, a loan can also help you improve your credit score. If you apply for a loan and keep up with all the payments, plus try and pay a bit extra each month, you will find your credit score will increase. But with that in mind, it can also have an adverse effect on your credit score. If you apply for the loan and end up overwhelmed in the interest rates and repayments, then it will do more damage than good, so always be sure to compare what loans are available first and which is the best option for you.