You can maximize your chances of approval for a loan by being truthful in your application, applying for smaller loan amounts, and applying with an appropriate lender.
Lenders check for various factors when determining whether to approve you for a loan, like your credit score, the reliability of the information you provide, and your ability to meet repayments.
This post will explain the actions you can take to increase your likelihood of being accepted for a payday loan or other small loans.
Choose your lender wisely
Many companies offer payday loans, but you should avoid requesting a loan from the first company you come across. Comparing options to find a lender that works for you could increase your chances of approval.
Some payday loan providers are more accommodating and likely to accept applications than others. Some specialize in lending to customers with bad credit. If you have a poor credit score, your chances could be better at getting a loan from one of these lenders.
You could consider using a loan connection service, like Loanza, to get you in touch with a lender that’s suitable for your circumstances and needs.
When filling out your application, it may be tempting to exaggerate the reality slightly. Most payday loan providers will inquire about your employment, current income and credit score.
It may seem harmless to increase your chances of approval to tell a small lie about your income or mortgage payment, but it might have the opposite impact. Keep in mind that lenders will easily be able to discover if you haven’t been honest.
They will be comparing the information you provided in the application form to your records and financial history. A lender will be less likely to accept you if they detect dishonesty in your application.
Fill in the loan application form honestly and carefully to avoid errors. Accurate details increase your approval chances!
Refrain from submitting multiple loan applications
Multiple applications are not always a bad idea, but you must keep track of the number and type of credit inquiries you make to keep them from piling up. This is because submitting several applications can harm your credit score.
Financial advisors generally advise applying for the same type of loan (e.g. payday loan) within a few days – these are categorised as one application and leave only one footprint on your credit report. Different types of loans would leave multiple records on your credit file, and as such, is not advised.
Waiting at least six months between credit applications is good practice. In this span, the initial query will be less noticeable on your credit report, and you will have more opportunities to repair your credit score.
Complete the application carefully
A payday loan application can be completed in minutes, and the procedure is not difficult. Take your time filling out the application because it’s easy to make a mistake or provide an incorrect answer.
Before you begin completing the questions, take some time to read over all of them. Ensure you have all the data required for your application, like identification or banking information.
After completing the application, ensure everything is correct by rereading it. A small error on the form might drastically reduce your chances of approval.
Check your credit status
You should assess your credit rating to determine your likelihood of approval before applying. A payday loan provider may look at your credit score when reviewing your application, so being aware is advised.
If you are aware that your credit score is low, you can select a lender who is more likely to accept you, or take action to raise your credit rating before applying. A good credit score increases the chances that you will be given a loan.
There are a few things you can do to improve your chances of approval for a payday loan, such as applying for smaller loan amounts.
Apply for smaller loan amounts
Applying for smaller loan amounts will always increase your chances of approval. If borrowing $800 could be enough to help you out, don’t request to borrow $2,000. Only apply for the amount you really need.
Additionally, remember that the longer you borrow, the more you’ll ultimately pay in interest. This means that taking more than you need will cost you more money.
If your application for a payday loan is approved, you will be given an offer; it is up to you to accept or reject it. Even though the lender has received your application, they reserve the right to revoke it at any time.
To ensure that you have obtained your payday loan, respond as soon as you receive any offers. When you get an offer, you should take time to understand and evaluate the terms, but don’t wait too long to respond.
Improve your credit score
Before applying, it is best to check your credit score. There are things you can do to raise it is less than good.
Little acts, like signing up for the voting list and paying your payments on time, will all help to improve your credit score. Before requesting a payday loan, make sure you don’t already have a significant amount of debt and pay off as much as you can.