Factors you must review to ensure approval for loans

Here, your credit scores should be mentioned as these are the primary parameters. If your scores are good, you will be seen as creditworthy and vice versa. When you have poor credit scores, you will get limited opportunities.

A smaller number of lenders will be interested in your application. This means there will be fewer chances of getting better rates. Above all, there is no guarantee that the willing lenders will process your application.

If any of the other factors work against you, the chances of loan approval will be zero. Therefore, you will have to do the needful to improve your scores so that you can get a good number of options.

Income stability

Loans are provided when you are facing cash crunches. Now, you might be going through a rough patch as you do not earn money. This situation can also encourage you to apply for loans.

However, here, your chances of getting loan approval will be zero. This is because the lender will validate your earnings. It does not matter if you do not earn money directly from a job.

In that case, you should be earning money from other sources. You might do a side job to support your necessities and generate savings. These types of earnings are also acceptable, provided they can support you in repaying loans.

The only concern of the lender is loan payments. Income is the steadiest way to ensure that you are making money either regularly or irregularly. If you are earning a steady income, even from a freelance gig, the lender will have no problem.

Track record of your employment

If you are doing a job, the lender will be looking forward to reviewing your employment history. This is to check if you are continuing with the same job or have switched jobs. Frequent switches can be alarming for the loan providers.

This can establish that you do not have a consistent source of income. When your earnings are irregular, managing funds for loan payments will be difficult. This will automatically increase the risk factor for the lender.

Besides, without a job, establishing a steady employment record will be difficult. The lender might not consider these borrowers as reliable.

Collateral or a guarantor

Maybe you have some red flags in your financial life. Some of them might get overlooked by other positive sides of your financial profile. In case setbacks like poor credit are hard to avoid, you will have to think of ways to provide repayment assurance.

At the end of the day, the loan provider will want you to repay loans on time. Bad credit shows that you are already struggling financially. Repaying loans within the given deadline will be difficult for you.

Here, collateral or a guarantor can increase the chances of loan approval. When you pledge assets, this will act as a security that the lender can use to recover loan payments if you cannot pay back. Then, you will never be able to get back your assets.

Besides, with a guarantor factor, you need to find a person who has a good credit history. At the same time, they should be earning a stable income as they might have to support loan payments on your behalf.

Produce correct details

You can apply for loans online, but be careful. Do not be in a hurry to fill out the loan application hurriedly. It is true that the online application is seamless.

However, you should hurry up, as you can get loans only when the lender approves loans. Now, if you do not provide the correct details, your application cannot be processed on time.

The bottom line

Guaranteed loan approval is not something you can instantly achieve after submitting your loan application. It will happen if you work on the factors that are the ultimate positive catalysts. You should not look for loans that claim to provide 100% approval.

Rather, you must look for loans that give you the opportunity to improve the chances of loan approval on your own. This has more potential as you can work on your capabilities and fetch an opportunity to borrow. Here, you will not have to deal with uncertainty.

You do not even have to become an unwanted victim of fraud. Loans claiming guaranteed approval are often meant to trick you.

Emma Parker

Emma Parker is a financial counsellor at LondonLoansBank and has been serving for over 5 years. She is a psychology graduate from the University of Glasgow. Since she has keen interest in the finance field, she pursued a diploma course in banking and finance that led her to opt for her current career. She assists people choose the best loan based on their current financial situation and credit score. As Emma understands how people react to money problems, she gives them a helping hand to solve their financial complications.