How to get your loan approved

The credit crunch has made getting a loan allot more difficult than it used to be, particularly if your credit record is anything less that excellent. This is especially true for applicants who are tenants and therefore have no security. Many high street banks stopped lending all together, or have restricted their lending to their own customers. It is therefore most important to do your homework before you start applying for loans so as to receive your loan as quickly as possible and avoid disappointment.

Improve your Credit Record

Before you do anything read our article "How to improve your credit record". Make sure you follow the instructions to the letter, so that when you apply, your credit record is as good at it possibly can be. Obtain your credit file from one of the credit reference agencies, such as Equifax. It will show conclusively whether you have good or bad credit record, so that you adjust your strategy accordingly.

Establish a good history

See if you can establish a stable residential and employment history if possible. Lenders would like you to have been at the same address for at least a year and with the same employer for at least six months. Plan ahead, so that you apply for the loan before you move house, or before you change employers, not after. Other details that will help your application is having a land line telephone number and, what most people don't realise, being able to provide an email address. Some lenders would not consider an application if the applicant cannot provide two telephone numbers, one of which must be a land line, and an email address. Indeed, some lenders would only provide you with the acceptance notice by email. So be prepared.

Don't make several applications within a short time

It may be very tempting to blitz the internet with one application after another. Don't. It is a sure way of damaging your credit record. All credit searches are recorded on your credit file and lenders take a dim view of too many searches in a short time. Do your homework. Find a long established specialist broker that is more likely to accept you the first time and apply. Wait for their decision before you do anything else. You shouldn't need to wait long. A decision can be given within a few minutes and at the outset within 24 hours. If you are declined then you can try another broker. If you are declined again stop applying. If you don't it will certainly damage your credit record even further.

Review your options. Consider whether your loan can wait for 3-6 months. If not, the only alternative left is a Guarantor Loan. Find somebody with a good credit record who can act as a guarantor for you. Your guarantor can be a relative, a close friend, a colleague or even your landlord. If your guarantor has a good credit record you should have no problem being accepted and you can have your loan. Make sure you make every repayment on time. After six months of regular repayments your own credit record will look much better and you may wish to try for a non guarantor loan.

Finally ...

... these days credit is not easy to easy to come by, particularly if you have credit problems. Searching for the right loan can be a frustrating and stressful experience. This is why it is so important to be realistic and down to earth with your requirements. If you have bad credit it is unlikely that you'll be able to find a large loan. Be content with a smaller loan for the time being, pay it on time for a few months so that your credit record will improve. Then you can try for a larger loan. Follow this advice in order to avoid the usual pitfalls that people encounter when searching for the right loan.