Many people use loans to help them with large purchases. This can be as a result of having to replace a white good in an emergency or because we need a new car or want a holiday. Whatever the reason for the borrowing, we will want to make sure that we can get the approval for the loan that we need. This is not always as easy as it seems.
As so many households have debt these days, it can be easy to think that borrowing is a simple thing that is available to everyone. However, this is not the case. Although there are a few types of loans where credit checks are not done, you still need an income to borrow money and most will do a credit check and some even look into whether you can afford the repayments. Therefore it is worth examining your personal situation to see whether you are likely to be accepted for a loan, before you apply. If you apply and get turned down, this will be shown on your credit rating and if a potential lender sees that another has turned you down, they may feel it is a bad sign and also decide not to lend to you. Alternatively they may decide to lend to you, but feel you are a risk and so charge you higher interest.
It is therefore worth spending a bit of time thinking about whether you would make a good borrower before you apply for a loan. This can be handy if going to a lender like Brilliant and will be useful for yourself as well. Start with thinking about your income, or if relevant your household income and whether you think that you could cope with borrowing money. It is maybe not so much how much you have coming in that is so important as how much you have going out and whether you have enough money left over to make repayments on a loan. It is worth working out how much the repayments will cost so that you can accurately work out if you will be able to afford them. This is as important for you as for your lender, as you want to make sure that you are not in a position where you cannot manage financially.
If you are happy with this then it is worth looking at your credit record. You can check it for free using several companies and you will be able to check that the information on it is accurate. It is worth doing this because if it shows records of outstanding bills, credit agreements or things like that which are not correct, then it could not only mean that your lender may be put off lending to you but that if they do lend they will charge more interest as they will think that there is a higher risk. Also look at things that are correct but could be improved. Perhaps any loans you already have, any outstanding payments and things like that. You may be able to pay those off and them improve your credit rating.
Whether you get approval can also depend on who you apply to. Different lenders have different criteria and so it can be a case of approaching several and seeing who will lend you money. Unfortunately, when you apply for a loan it will appear on your credit record so the more times you get turned down, the harder it will be. Therefore it could be wise to speak to the lender first and ask them what the likelihood is of them lending to you. Some will even have an app that you can use to find out. This means that you can choose who to apply to based on who is most likely to approve the loan.
So there are quite a few things that you can do in order to improve your chances of being approved for a loan. It is worth looking into this and making any necessary changes so that you are less likely to be turned down which will have a negative impact on your credit record. It is fairly easy to do and should not take a lot of time but could have a significant impact of the chances of you getting a loan. So if you really want to borrow some money, then work hard first to improve the chances that your application will be approved.