Undoubtedly, bank loans are very safe and one of the most reliable financial institutions. However, there are quite a number of reasons why people wouldn’t prefer to borrow a loan from the banks and would rather choose the instant cash loans lenders to avail an easy, hassle-free loan. Though the safety of the money is guaranteed, the stringent rules and regulations that are imposed by the banks are a major turnoff for the borrowers. So, they prefer to move on to the other financing options like the payday loans from direct lenders, who offer quick cash without too many complications.
Money is important to everyone. The banks carry out strict verification only because they do not want to risk their money by lending it to a wrong person. So is the case with the quick cash loan lenders also. The lenders also carry out verifications, but, their way of doing it much softer than that of the banks. These direct lenders follow a less strict and more malleable process, which is more favorable to the borrowers. There are a few basic things which the lenders verify mainly before offering any low interest personal loans and, all these factors will be weighed equally to help the lender make a decision about approving or rejecting your loan application.
In this blog, we will read about the most important factors which determine the fate of your application form and are considered by the lenders while they process your loan application form to decide the status of approval or rejection.
• Your Income – Whether you are applying for a personal, a business loan, or a credit card, everyone will first check your income. It is so obvious! A person who has a stable and regular income is a less risky target and assures a timely payment of the availed loan. A person who does not have a stable income is more likely to default a payment which could be a prospective loss to the lender. So, it is better to be prepared with all the meticulous documentation and records to prove your income while applying for instant cash loans from the lenders.
• Your Employment – Although the UK policies provide different loan terms & provisions for people with various employment criteria, most lenders would still prefer it if you are in the traditional employment field. Having a regular job with a stable income will add more weight to your loan application and prove you to be a reliable candidate to borrow a loan. However, if you are a freelancer or self-employed, there are chances that your income may be irregular and, this might not leave a very good impression on the lender. You may be a sincere borrower with all plans to repay the loan on time, but it will be harder to prove your sincerity to the lender without a stable job & income.
• Your Credit Scores – Credit scores are the numbers which play a major role in deciding the terms in regard to borrowing loans from the lenders. They are incredibly important factors which are more like an admission card to get a loan. Although the credit scores are not mandatory for a lender to approve a loan application, they do weigh down the possibilities of its approval, the applicable APR, the final loan amount, etc. Having a good credit score could easily have your loan application approved with more preferable loan terms, whereas having a poor credit score will pose you as a threat and will come with more unfavorable terms like higher APR, lesser loan amount, etc. Many lenders provide the loans for even poor credit scores also, but the terms should be understood well by the borrower before finalizing a deal.
• Your Income – to – Debt Ratio – People earn money to spend. But financial management is an art which can be practiced only by a few. Balancing your income and your debts is very important as it affects many financial matters. If your income is more than your debts, it shows that you are working out finances considerably well, however, if your debts outdo your income amount or if it is close to your income levels, it could affect your possibilities of getting your loan approved.
• Your Credit Gaming – Many people keep looking out for deals, offers, miles, or other incentives and they jump at it when they feel a preferable offer is available. This is called as ‘credit gaming’. All the lenders and financial institutions keep a check on your financial activities and if you are person who jumps at such offers, it would be difficult for the lenders to trust you, as you may back out after your benefits have been fulfilled. So, regardless of your income, or your credit score, they might reject your loan application if they feel that you are not a trustworthy candidate.
The banks, finance companies, and the lenders are all giving you money as a loan because it is their business and they get a profit from it. It is not because they are just good people in the world. So, they make sure that their money is going into the right hands. It is up to you to keep a clean financial record so that it does not affect your future finances. Having an elegant and a decent financial record will help you to a great extent in having preferable terms and conditions while availing a quick cash loan. At FriskyLoans, our lenders will be very considerate and will try to work on providing suitable loans with preferable terms.