Denied — it’s the last thing you want to see after you’ve applied for a loan, but it could happen.
No matter how badly you need it or how nicely you ask, there’s never a guarantee you’ll be approved for a personal loan. Approval rests on how well you match your choice of lender’s eligibility requirements.
The requirements tend to vary by lender, so making the best impression relies on choosing the requirements you fit best. Here are three tips to help you do that.
Check Your Location
Online lending certainly offers a convenient alternative to in-person banking, but it makes it easy to overlook something critical: location.
Online direct lenders that offer bad credit installment loans have licenses given to them by the state where they operate.
This license is an essential feature of direct lenders online, as it ensures they meet the requirements to grant funds in your state. But it also means they can only offer loans in states where they’re licensed.
If you don’t live in that state, you won’t qualify despite being able to access their site and application page.
So, let’s say you live in Utah. If you apply with an online lender that isn’t licensed in that state, you’ll be denied. You’re more likely to find a lending solution in Utah by researching lenders that have a license to offer installment loans in Utah. The same principle applies to any state you live in.
Focus on Your Credit History
One of the first things most mainstream lenders will look at when reviewing your application is your credit score. This three-digit number represents your creditworthiness or the likelihood you’ll use your next loan responsibly.
Generally speaking, mainstream lenders have a cut-off point when it comes to scores. They may not approve you if you have subprime (or bad) credit.
If you have bad credit, you probably already know it, but it’s a good idea to double-check. You can get a free report here to review your report and make sure it’s accurate.
The higher your score is, the easier it will be to borrow money from any lender, so you should focus on improving your credit whenever possible.
If an unexpected emergency happens before you see a change in your score, research bad credit installment loans online. A lender of bad credit installment loans may still check your score, but it may not be the only factor when considering your request.
Look for Mistakes
A tiny typing error can have a huge impact on your application. Errors look fishy to lenders — whether it’s a spelling mistake in your name, bank’s address, or employer’s name. An error in your Social Security Number or address could also confuse your lender.
Lenders use this info to perform a background check on you first and foremost. Any errors could mean they’re bringing up someone else’s information, which could flag your application as a fraud.
Something to keep in mind: rejection isn’t a unanimous decision made by all lenders. If you receive one rejection, find out why. Either fix this issue before applying again or move onto a loan that’s more appropriate for your needs.