What Personal Loans Are Easy To Get Approved For?

What personal loans are easy to get approved for?

There are many instances in our lives where we would all like a small cash injection. Maybe we want to buy a new car, a new laptop or we simply are finding it difficult to make a paycheque stretch until the next payday due to an unexpected bill landing at our door.

For that reason, some of us may want to apply for a loan to help us in the short term. But is that an easy process? And what type of loans are there to help us in these instances? In our guide to personal loans, we outline what types of loans there are and identify their good and bad points. By understanding what options are available to you, you can pick the right one for your circumstances.

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What are the different types of personal loan?

There are several different types of personal loan that will serve different purposes. Whichever you decide to apply for, ensure that you fully understand the terms and conditions set by your loan provider. Doing so arms yourself with the best information possible that will enable you to pay off your loan on time, if not earlier.

Unsecured loan

An unsecured loan is probably one that we all think of first when we imagine a loan. When you borrow money from a lender, you pay back that loan in regular increments or instalments over time. You do not need to put down any collateral to access such a loan – meaning that you do not have to guarantee it in any way.

Secured loan

A secured loan is similar to an unsecured loan in how it is paid back, but you need to have some form of collateral to be extended such a loan to apply for one successfully. For some, this may mean a car, a house or a piece of jewellery. Should you fall behind in payments, anything you own with any real value can be used to pay off the loan.

Debt consolidation

Debt consolidation is when you amalgamate all your debts into one place with one provider so that you only pay one payment each month. They can be a good way of minimising the amount of interest you are earning on all your debts, as by moving it to one place, you pay off your debts to other providers. Thanks to having one large debt amount with one provider, you attract a lower interest rate overall. As a result, it makes your debt easier to pay off as payments become more affordable.

Co-signed loan or guarantor loan

A co-signed loan is similar to a secured loan in that the lender is seeking a form of assurance that they will receive back their loan amount through another source, should you miss too many payments. In short, it means you have another person co-signing the loan agreement, and it is that person who will pay back the final amount should you be unable to. That person is sometimes known as a guarantor.

Line of credit

A personal line of credit works a little like a credit card. It means that a person can continually borrow up to the amount set on the line of credit. They are then only ever charged interest on what is spent, which they need to repay on time to ensure that they do not affect their credit rating. Often, lines of credit are backed by collateral that the provider can use should a customer fall behind in their repayments.

Your questions, answered

All loans vary in how they are backed and therefore applied for. Getting a loan is often very dependent on a person’s credit rating and what they can guarantee a loan with. For that reason, some are easier to be approved for than others. For example, a personal line of credit will require a very good credit score and a healthy credit rating, particularly if a person is not backing the line of credit with any form of asset.

A co-signed loan can be easy to apply for as another person guarantees it. However, that depends on that person’s credit rating and income too. If they have a poor credit rating, you may find it difficult to be approved, or if they do not have a regular income. This is because lenders will see a higher risk of not receiving repayments on time.

The secured vs unsecured loans will be easy to apply for depending on your circumstances. If you have an asset to back up your loan, applying for a secured loan may well be straightforward. However, if you don’t, applying for an unsecured loan may be easier for you, but getting approved is often dependent on a good credit score and credit history.

Debt consolidation can often be a good option for people with many debts as those debts or loans have already taken out. Applicants will often have their applications considered as existing lenders have outstanding amounts paid off. At the same time, the debt consolidation provider stands to make more money from having a larger debt on their books.

Having a good credit rating certainly makes applying for a personal loan easier. But it is not always the case that you need a good credit rating to access a personal loan with all providers. It can be easier to apply for a loan with a good credit rating because you are deemed more creditworthy by lenders. What that means in practice is that lenders feel you are less of a risk to lend money to. They make money themselves by receiving loan repayments thanks to the interest that they charge on loan amounts. 

To make money, lenders, therefore, need to receive those repayments in the first place. If they don’t, they’ll make far less profit. As a result, they only want to lend to people they believe will make payments as scheduled, on time.

If you have a poor credit rating, lenders judge your ability to make payments in the future on your past. If they have seen that you have missed payments in the past, they will feel that you are more likely to do so in future, making you a less desirable candidate for a loan.

At The Money Shop, we believe that is a dangerous cycle to get into. Just because you have missed payments in the past does not mean you will do so in the future. While our lenders have a set amount of criteria that applicants need to meet to apply for a loan successfully, they do not immediately dismiss an applicant with a bad credit rating. Instead, they like to see a steady and regular income that means customers will be able to pay off any debt they take out.

Approaching The Money Shop is a fantastic idea if you are struggling to access funding from other lenders. Our lenders take a flexible approach to applications from our customers. Even if you have a bad credit rating, lenders will still consider your application fully as they also run an affordability check to ascertain if you can afford to take out a loan. They do this to ensure you can pay back any loan they provide. We do not want our customers tied into a never-ending repayment schedule that makes it hard to pay off the full amount.

Our criteria are:

  • You must be aged over 18
  • You must be a UK resident
  • You must be employed, either by a business or you work for yourself
  • You must be a UK bank account holder
  • You must receive a regular income.

Check out our range of personal loan options on our website today to see what products we have that interest you. You should be able to find a loan that works for you and your circumstances – so whether you are trying to pay off an outstanding invoice, need to replace your boiler, or you simply are running low on funds this month, you’ll be able to access a loan that answers your needs.