Applying for a loan can be nerve wracking, no matter how much it’s for. Take a look at our tips for improving your chances of getting approved for a loan.
Know Your Credit Score
Your credit score is one of the main factors in getting a good deal for a loan, as well as being approved for one. Lenders will look at your credit file before they will lend you money, to figure out whether you are a risk to lend to. To be an ideal borrower you need to have a good credit score, however, if your credit score is too perfect (such as paying off your credit card in full each month) the lender won’t be able to make a profit off the interest they charge you.
Looking at your credit score will help make sure that it is accurate by checking for mistakes, and help you prepare for any surprises. If you look at your credit score and it isn’t as good as you had hoped, then you may want to avoid applying for any expensive credit until it is in a better position.
Check your credit rating on sites like Experian before you apply.
Get on the Electoral Roll
Most companies use the electoral roll to verify your identify, particularly for mortgages, so it’s important to make sure that everything is up to date.
Be Prepared with all Necessary Documents
You will usually be asked to be ready with particular documents before you can apply for a loan, so before you do, make sure you have them, that they are up to date and correct. This makes the whole process easier for both you and your lender.
It’s important to make sure that you’re getting the right loan for your needs. There are lots to choose from, such as secured and unsecured, and all offer different amounts depending on your requirements. Secured loans, such as a Nemo Loan, often offer much more money and a longer repayment term. However they are ‘secured’ against your home so always make sure you can afford the repayments. Unsecured loans, however, don’t use your home to secure the loan against, so there’s less money on offer to you, and a shorter repayment term.
Know Your Budget
Before you think about getting a loan, you need to think about your budget, and how much you can afford to pay back each month. While your position might change for the better, it might stay the same, or even get worse, so it’s important to know how much your budget is, so you can figure out how much you can borrow.
With these tips considered, taking out a loan should be simple and painless.