Is 98% loan acceptance possible despite bad credit scars?
Poor scores are always treated like a grave problem as they identify your financial capacity. At times, loan applications witness rejection from lenders because of this factor. Traditional lenders follow this regime while sorting out the loan request of a borrower like you.
In this situation, successful acceptance is a far cry. However, it means that successful approval is a rare decision, provided a few aspects are favourable. Therefore, you cannot say that your chances are zero.
Sometimes, your circumstances matter at the time of getting loan help. Above all, the type of lender you choose will play a critical role in making this unexpected thing happen for you. Approval is a breeze with direct lenders, given you have fulfilled the other conditions.
For example, if you want a £2000 loan with bad credit and convincing affordability, you can expect 98% acceptance chances. Here, your selected amount is small, and your present financial capacity is noteworthy. In this case, the lender might not have a problem with your credit status.
The possibility of getting a positive response is not something you can predict before. Nevertheless, you will have to choose the lender smartly. You can expect other things with this type of loan assistance. Find them in this blog.
How is it possible to ensure 98% acceptance with low credit?
None can guarantee you to provide loan help ahead of processing your application. It is for sure that the lender will not blindly offer loans without validating your financial profile. The evaluation process might be rigid with mainstream loan providers.
The requirements become lighter when you turn to private lenders. However, the extent of the amount should not be huge as the entire process involves some risks. How do I go about this process?
Will credit checks be mandatory?
You might doubt if getting guaranteed loan approval with no credit check is possible or not. First, because you already know that the lender is ready to accept your poor scores. For this reason, a credit validation does not make any sense.
Hard checks should not be a part of this lending process. However, a soft analysis of your affordability will be a must. It will include an evaluation of your present financial activities.
Timely payment of current bills will project a positive image of the borrower. The lender will not have any inhibitions regarding getting your money back within the given time frame. Therefore, conducting a soft check is essential, but not hard checks for online lenders.
Will producing collateral be necessary?
No, if you want to apply for loans with direct lenders, there is no need to fulfil any collateral requirement. Your ongoing financial profile will have a weightage, which should be convenient for the lender to consider.
Thus, getting loans is doable for someone who is a tenant somewhere or is a non-homeowner. If you want a bigger amount that an online lender cannot cover, you will have to seek assistance from traditional lenders. They might ask for collateral as a double assurance arrangement.
In the case of any default, the lender will utilise the security provided to get money back on time. In this case, you cannot think of getting your assets back. The decision is on you, as the situation will be unique for every lender.
How can you forward the loan application?
The traditional process of application involves a lot of paperwork. This portion is not necessary when you apply with a direct lender. You can even skip paying a visit to the bank branch multiple times.
The process will take a few minutes to complete due to the lesser number of steps. The best part is that you can be anywhere and even at your home while filling out the application. No visit to the bank branch is needed as the application form is available online.
The applicant needs to enter a few valid details that would hardly take much time. This paperless method of application saves your energy and time. You will not have to submit any documents during the online application.
Your details will be used to customise a loan offer. You can expect to get loans at practical rates. Above all, you can seek multiple loan quotations from different lenders.
Comparing them together, you can finalise the loan deal that can fit your pocket size. Opting for a manageable amount for you is smart, or loan repayment might get stuck halfway.
Will a guarantor factor be highlighted?
As mentioned earlier, poor credit scores will not be a problem, as the prime concern for the lender would be your present financial condition. Based on it, they can confirm if you can make some savings to go ahead with loan payments.
It means the lender will be keen to ensure that the borrower can repay loans on time. They will not demand a guarantor if that can be proved with affordability. This factor comes into the picture if you cannot ascertain repayment.
In such cases, you will have to involve another person who will commit to paying back loans on your behalf. However, you have the potential to afford loan payments and, thus, do not need anyone else to support you.
Does 98% acceptance mean a heavy price?
No, the lender will approve your loan request based on your financial status. Moreover, credit scores are not the only determining factor in this procedure. Your affordability is a positive catalyst to enhance your chances of getting acceptance.
You do not have to trade in the highest possibility for loan approval with high-interest rates. The online lenders personalise loan offers to make borrowing reasonable and not unachievable for you. For this reason, they will not impose random rates that are beyond your capacity.
They know that you will not opt for loans if rates are not affordable for you. Besides, they cannot accept your application if your current status projects your inability to repay loans.
The bottom line
Now, you know that your credit scores cannot influence loan acceptance chances. For that, you must get in touch with the right lenders.
Ailsa Adam is the Editor-in-Chief and former content head at Hugeloanlender. She has been a valuable member of the content strategy team since 2017 due to her abundant experience in the finance sector. Passionate about helping individuals navigate the world of loans and personal finance, she has dedicated herself to acquiring extensive knowledge on various financial products. Before her role at Hugeloanlender,
Ailsa worked as a seasoned journalist and writer, specialising in creating informative blogs and articles on diverse loan types. She is known for her meticulous research and commitment to delivering accurate and engaging content. She holds a degree in MBA Finance and has a keen interest in creative writing and art.