Getting Approved For a Loan
Many of us do not plan ahead for things, while there are many of us that do plan, one area none of may plan for is when we need to borrow money.
It is just something we do not spend a lot of time thinking about, loans, borrowing money, getting credit.
Then suddenly the time comes that we need a loan, it may be to buy a car, get a credit card, buy a property and we need a mortgage, or just to make a purchase we cannot save for, and then suddenly, we are thrown into the world of credit, credit scores, banks, loan applications, and all the questions that come with this:
* Income and expenditure forms
* Our details
* What is the loan for
If we do not have this information at hand, it may take a few moments to gather it all.
And all of it can be needed in order to apply for a loan.
We get ourselves ready, psyched up to get this loan, to buy a car we need, buy a house we want to live in, for whatever reason, and then maybe the loan is denied, rejected.
That is not a good feeling.
And the first question may be, why was my loan denied???
Let’s look at this from the perspective of a lender, the one lending the money, the one you are asking to grant you the loan.
Why Are You Being Denied For a Loan?
As a lender there are some things you look at when reviewing a loan application, and considering granting a loan. All lenders look at these factors, and some are required to be looked at by lenders as per the governing bodies or those who licence and regulate banks, credit, and all things money.
Age: And no we do not mean age discrimination, we are looking at are you old enough to aply for a loan. Are you at least 18 years old.
Then are you living in the UK.
You do not need to be a citizen of the UK, but are you currently residing in the UK.
Age and residency can be issues as to why a loan may be declined.
Affordability: This is a biggie…can you afford to repay the loan, and if so, can you prove it; can you document you can afford the loan.
This is where a detailed income and expenditure form may be required by the lender.
The lender wants to see all your income and all your expenses to insure you can afford the payments on the loan.
If you cannot show affordability, the loan may be rejected at the start.
Credit: What is your credit score? Do you know it? Have you viewed your credit history?
You need to know what your credit file looks like and what your credit score is prior to applying for a loan.
You may not know what credit scores the lender may require to be approved for a loan, or for various interest rates, but you can know if your credit score seems good, and also if there are any negative marks on your credit file.
What You Can Do to Get a Loan
In order to insure and improve your chances of getting approved for a loan, ther are a few thinsg you can do:
* Complete an income and expenditure form prior to applying for the loan. Know you can afford the loan, and be able to show this to the lender.
* Know your credit score, and if there are any negative marks on your credit history. If there are any errors or bad marks, look as to why, get the errors corrected, and make sure the report is accurate.
Lastly, if you cannot get approved a loan on your own, seek out a guarantor.
Someone who can be a guarantor for your loan, guarantor loans are based on affordability and the fact the borrower has a guarantor.