When we look at unsecured loans, we always get relief thinking there is no collateral. That is a great thing, actually. You don’t need to worry about bringing in any asset of yours for the loan. But what we also miss out on in these loans is something quite vital. And that is their easy approval.
If you know about personal loans, we can say that people often look for them for easy approval rates. As a matter of fact, anyone would get a personal loan these days under certain conditions. These conditions are not uncommon and are also liberal by nature. So, in the technical sense, we can say that almost any borrower is eligible for this loan.
In this post, we are going to discuss these conditions. Remember that you can always learn more about them and clear your doubts when looking forward to transparent communication between you and your lender.
- What Conditions Make a Loan Approval Easy and Guaranteed?
To be frank with loan offers, personal loans are unsecured online loans. As mentioned earlier, they come with no collateral requirements. Because it is a personal loan, the borrower is free to use the loan in any preferred way.
But we are going to talk about the approval part here. With that being said, we may define the type of easy loan approval coming with personal loans with the following conditions mentioned in 4 points:
- When You Choose Borrowing from a Direct Lender
A direct lender is an organisation dedicated to offering you loan services. Direct lenders focus entirely on providing loans and are not responsible for other sorts of financial tasks, which banks and credit card issuers conduct.
Hence, this organisation can give you more facilities than what you are looking for. To start with, the approval rates are almost 99% with any direct lender. To get this facility, you may need to be clear with your repayment terms. This clarity from your end can make that approval rate 100% guaranteed too.
Direct lenders are known to offer loans with easy approval rates. However, added to that, a borrower may get additional facilities such as easy repayment packages and comfortable loan terms. In addition, you may not have to worry about including guarantors or sharing information about poor credit scores.
- When the Debt-to-Income Ratio Is Favourable
The debt-to-income ratio makes more sense to lenders because they use it as a mandatory process to determine your loan affordability, i.e. whether or not you can repay the loan instalments comfortably.
Before learning about the DTI ratio in detail, we need to learn a little about the connection between personal loans and your income statement.
It is your earning that helps you sanction your unsecured loan. You do not need to worry about unsecured loan approval when you share the evidence of your income with the lender. Of course, your income has to be sufficient to repay loan instalments.
Remember that direct lenders will check if repaying the instalment is comfortable for you according to your income status.
This is where the debt-to-income ratio comes in. It is a percentage that calculates the portion/ amount of money from income that’s dedicated to loan repayments. Usually, lenders approve a DTI ratio which is lower than 36%.
But again, there are special needs from borrowers too. Direct lenders understand this and may help you in advanced measures even if the DTI ratio percentage goes up to 50%.
These matters are actually subject to individualised borrowing. One may get approval for the said percentage rates. But others carrying different alternative rates may also be assisted because they can have other aspects associated with their borrowing needs. These particular ‘needs’ can assist a direct lender in finding alternative routes to approve your loan.
- When the Credit Score Is Upgraded
The credit score is vital for taking out loans. That being said, no one mandates a credit score as a compulsory document for approving a personal loan.
What happens if you don’t use a credit card? In that regard, you may be eligible for a no-credit-check loan. Direct lenders do have policies for these kinds of loans as well.
But when a credit check comes into play, direct lenders don’t make a hard credit check official; they do present the need for a soft credit check. It is a process that helps the organisation to define a borrower’s financial behaviour. To assist your lender in running this check, you must progress in updating your credit score to offer the lender the most recent data.
Call or mail your credit card issuer asking for a credit score and report upgrade. Once you receive the updated details, please go through it by yourself. If you find errors, then get them rectified with your credit card issuer. You may apply for the loan when you have the correct and updated credit report and score.
- Approval Is Even Easy with Alternative Income
Yes, most borrowers think that they should work at a 9 to 5 job or strikingly impressive business revenue to find approval for a personal loan. This thought is, however, a little misdirected.
It doesn’t matter if you are not working at a regular job. An alternative income, such as a part-time or freelance job, can quickly help a borrower get a personal loan. You don’t need to worry about loan approval as long as you can supply your lender with the proper evidence about your income with the amount statement mentioned. Some of these alternative works include:
- Part-time work
- Contractual Work
- If your next employer has hired you
- Business revenue
Many people earn benefits from governmental or other organisations such as non-profit ones. You may also use this document to get approval for personal loans on benefits.
As mentioned earlier, getting loan approval is not difficult. It is easy. All you need to do is look at the right place and apply it correctly.
We are a direct lender organisation and will happily help you on this matter extensively. Comment on this post or write to us to learn more about unsecured loan approvals.
Lisa Ann has developed a well-experienced professional career. From managing the staff of more than 50+ loan experts at Fastmoneyfinance to boosting the delivery of various loan offers, she has acquired many challenging roles to come out with the best results for the company. Lisa Ann is a Senior Content Author and the Chief Financial Advisor at Fastmoneyfinance. To back her massive experience in the UK’s financial industry, she has the postgraduate degree and diploma in Business and Finance.