How to improve your chances of getting a payday loan
No one is ever guaranteed to be approved for finance of any kind, including payday loans. If you have been rejected for a loan application in the past or are considering applying for your first payday loan, there are some things you can do to set yourself up for success. Many individuals believe that being approved for a payday loan is black and white, and you are either eligible or not. With many lenders, this simply isn’t the case.
Many different things impact a loan provider’s decision to approve or decline an application. They will consider your credit score, income, existing debt, borrowing history, and more. Before you choose your payday loan lender and make an application, read on to find out how you can improve your chances of being approved.
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If you are sure you meet the lender’s criteria and have decided on a payday loan for your requirements, you might think you are ready to make your application. Before you submit your details, you should consider whether you are going to be approved. Lenders look at your credit score and borrowing history when deciding if your application is approved or not. If you have been turned down for finance previously or not sure that you will be approved, there are some things you can do.
Getting accepted for a payday loan is never going to be a sure thing, but you can improve your chances with these simple steps:
Complete the application with care
Applying for a payday loan can take just a few minutes, and the application process is not exactly lengthy. Don’t rush your application because it can be easy to make a mistake or answer something inaccurately. Spend some time reading through all the questions before you start filling in your details. Make sure you have all the information to hand that you will need for your application, such as ID documents or bank details. When you have filled out the application, take the time to re-read your answers before pressing submit to make sure everything is correct. A simple mistake on the form could instantly impact your chances of being approved.
Be honest
It can be tempting to stretch the truth a little when completing your application. Most payday loan lenders will ask about your current income and outgoings, as well as your employment history. Telling a white lie about how much you earn or how much your mortgage costs might seem like an innocent way of increasing your approval chances, but it can have the opposite effect. Remember that lenders are cross-checking your details against your financial records, and they will easily be able to tell if you haven’t been honest. If a lender sees you being deceitful in your application, you will less likely be approved.
Choose your lender carefully
Many companies offer payday loans, and it might seem easy to just apply for the first one you find. However, you must shop around and choose a lender that suits you. Some payday loan lenders are more flexible than others and will be more willing to approve applications. If you know your credit score isn’t up to scratch, look for payday loan lenders who specialise in poor credit finance.
Check your credit score
Before making an application, you should check your credit score to see how likely you will be approved. Your credit score is what a payday loan lender will see when considering your application so being aware is crucial. If you know your credit score is bad, you can choose a lender that is more likely to approve you or take steps to improve your score before applying. The higher your credit score, the more likely you are to be approved for credit.
Only borrow what you need
When applying for a payday loan, it can be tempting to apply for more money than you really need. If you are borrowing because you need to pay for something specific, only apply for your required funds. The higher your loan amount, the more difficult it will be to get approved, so keeping your loan as small as possible will improve your chances. You should also remember that the more you borrow, the more you will pay in the long run, so borrowing more than you need will end up costing you more in interest.
Respond quickly
When you apply for a payday loan, you will be given an offer if you are accepted, and it is up to you whether you take it or not. Even though the lender has approved your application, they could withdraw their offer at any time. Respond to any offers you receive quickly to guarantee you have secured your payday loan. Sometimes it is worth weighing up all your options upon receiving an offer but don’t take too long to respond.
Improve your credit score
We have already talked about the importance of checking your credit score before applying, but you can also take some steps to improve it. If you find that your credit score isn’t good, you should look at why and see where you can make improvements. Like registering on the electoral roll and paying your bills on time, little things will all work to enhance your credit rating. Make sure you don’t already have a lot of existing debt and pay off what you can before applying for a payday loan.
Find out more about getting accepted for a payday loan
For more information on getting approved for a payday loan, improving your credit score and understanding your debt, check out these useful resources:
- https://www.citizensadvice.org.uk/debt-and-money/borrowing-money/types-of-borrowing/loans/payday-loans/payday-loans/
- https://www.stepchange.org/debt-info/types-of-debt/payday-loan-debt.aspx
- https://www.which.co.uk/money/credit-cards-and-loans/debt-and-how-to-deal-with-it/payday-loans-how-they-work-a54fx6f02lbg
- https://www.moneyadviceservice.org.uk/en/articles/how-to-improve-your-credit-rating
- https://www.experian.co.uk/consumer/guides/improve-credit-score.html
