Increase the Odds of Your Personal Loan Getting Approved
There is no set method for getting a personal loan application approved. Some internet lenders also consider non-traditional information like free cash flow or degree of education. Requirements like credit score and income differ depending on the lender.
However, loan providers share a common goal: they all want to be paid back on time. Hence they only accept borrowers who can fulfill their conditions.
Below are some great suggestions to increase your probability of being approved for a personal loan.
Improve Your Credit
On applications for personal loans, credit scores play a significant role. Your chances of being approved increase as your score increases.
Examine your reports for mistakes. According to the Consumer Financial Protection Bureau, common mistakes that could lower your score include erroneous credit limits, closed accounts that are represented as open, and improper accounts.
Keep up with your payments. If you haven’t already, be diligent about making regular payments on all your debts, going above and beyond the required minimums whenever possible.
Your credit utilization ratio and payment history will both benefit from this. These two elements together account for 65 percent of your FICO score.
Get your credit limit raised. Ask for an increase by calling the customer support lines shown on the back of your credit cards. If your salary has increased since you first got the card and you haven’t missed any payments, your chances are improved.
Ask the creditor in advance if this plan would demand a significant strain on your credit because it could backfire and temporarily lower your credit score.
Balance Your Income and Debts
Your annual income is requested on loan applications, and you may include earnings from part-time employment. Start a side business or push for a pay raise at your current employment to increase your income.
Your debt-to-income (DTI) ratio is improved by increasing your income and reducing your debt.
Although not all lenders have rigorous DTI criteria, a lower ratio demonstrates that you can take on more debt because your current obligations are under control.
Don’t Request Too Much Money
Lenders may view requests for more money than you actually need to attain your financial objectives as risky and may be less likely to grant them.
Increased loan payments make it harder for you to meet other financial commitments, including student loans or mortgage payments, which further strain your budget.
Use the calculator below to calculate your potential monthly payment based on the loan amount and period you choose and your desired monthly payment for a personal loan.
Think about Getting a Co-Signer
Including a co-signer with better credit and income can boost your chances of getting approved if you do not already have good or exceptional credit (690 FICO or higher).
It’s crucial to cosign with someone who can afford the risk, as the co-signer is equally accountable for loan repayment.
Have an open discussion with the potential co-signer, so they know all the dangers before committing.
Choose A Trustworthy Lender
Most internet lenders are transparent about their minimum credit score and income restrictions and whether they provide choices like co-signers.
You can pre-qualify for a personal loan if you satisfy the lender’s minimal requirements and would like to obtain an estimate of the rates and conditions. Pre-qualifying with most lenders results in a soft credit draw, which does not affect your credit score.
Obtain pre-qualification from several lenders and evaluate terms and rates. The ideal loan option fits your budget in terms of fees and payments.
King of Kash provides online loans for bad credit with no credit check. We’re a trusted company that has been providing affordable “no credit check” installment loans for almost forty years. Apply now and secure your loan!
Cary Silverman is a consummate entrepreneur having sold multiple companies during his 20 years of business experience in the financial industry, but for him, it isn’t about the money. His success is rooted in his passion to focus on doing something better today than it was done yesterday. These days, he’s the CEO of Waldo General, Inc. that oversees the operation of King of Kash.