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Tips and secrets in getting approved for bank loans in the UK

Getting approved for bank loans is one of the hardest things that any borrower can accomplish in the UK today. Because of the recent economic hardships all over the country, banks are asking for more proof of creditworthiness and are generally more stringent. To ensure that your application for a bank loan will enjoy the best chances of getting approved, below are some of the things that you might want to consider.

The single most import factor in getting approved for bank loans in the UK

When banks evaluate your application for a loan, the first and most important question that you need to satisfy is: “Will you be able to make the proper repayments on time and on the agreed terms and conditions of the credit agreement?”

In the UK and the rest of the developed world, the answer generally lies on your own personal credit score. UK’s three major credit reference agencies, Equifax, Callcredit, and Experian, normally assign numerical values to every borrower as a means for lenders to gauge the person’s credit worthiness based on his or her past use of credit and this number is your credit score. Majority of banks that provide bank loans rely on credit score as an important factor in deciding whether or not to approve a loan application from a certain borrower.

why choose bank loans

This means that you need to build a strong history of responsible borrowing to show lenders that you have the financial capacity and attitude to manage debt so your application for bank loans will enjoy the optimum chance of approval. But the question now is how can you take out a bank loan if you don’t have a credit history? This can be true if it’s your first time taking out a loan and if you have not used any type of credit product in the past.

If you have an insufficient credit history, there are other alternatives to bank loans that you can consider and they include:

  1. Online short-term cash loans
  2. Guarantor loans

Both types of loan options will not require you to have stellar credit rating or even have a credit history for that matter. So if you are a first time borrower or someone who has a bad credit rating, then short-term cash loans and guarantor loan are alternatives to bank loans that you can look into.

5 tips for getting approved of bank loans

Bank loans are one of the hardest loans to get approved on but it doesn’t mean that it’s impossible to secure them. If you want to guarantee that your bank loan transaction is as smooth as possible, here are 5 key steps you can follow:

1.) Determine your needs

Don’t just immediately go to your bank to apply for a bank loan. Try to shop around and make a search online for different bank loans from numerous competitors.  Try to determine what it is that you really need from your loan, how much you should borrow, and what kind of terms are comfortable to your budget. It could be that you are searching for a certain kind of financial product like a mortgage or personal loan but the most important thing to do here is to pinpoint the optimum deal available.

2.) Secure the necessary information

Once you have pinpointed the kind of deal that is perfectly suited to your needs and present circumstances, reach out to the bank personally to determine what the eligibility criteria for their bank loans are. Depending on the bank, you may be required to set up a direct meeting so you will know what to bring and provide to obtain a successful approval.  Every bank is unique and so are their eligibility requirements and it’s important that you know firsthand what they are before you make an application to ensure that everything goes smoothly once the application process begins.

3.) Know your credit score

When it comes to bank loans, credit rating is an important factor that banks look into to determine whether or not you are eligible. With that being said, you should already know what your present credit score is prior to making an application. When you meet one of the bank’s representatives, the person should be able to guide you on the kinds of credit scores that they are looking for in every loan option available.

Preparation is key when applying for bank loans so be sure to grab a copy of your credit file from Equifax, Callcredit, and Experian, a month before you apply. Once you have secured a copy of your credit file, examine the report and try to see if there are any mistakes and inaccuracies. Lenders providing bank loans will focus closely on a borrower’s credit history. A single error can deal a negative blow on your credit rating which in turn will hinder you from getting approved.

Lastly, try to look at your own financial standing when you’re applying for bank loans. Lenders will only approve your application if they can see that you can genuinely afford the repayments.

4.) Establish a list of requirements

Now that you have gathered all the necessary information needed to secure bank loans, the next best thing to do would be to establish a list of requirements that you will need to gather to ensure that your application won’t encounter any issues. Again preparation is crucial so be sure that you have enough time in your hands to collect the needed documents such as employment records and tax returns. Bear in mind that if you fail to provide any of the documents and materials that lenders are looking for, it can result to an application denial.

5.) Know what to expect

The application process for bank loans can be hectic and time consuming so be sure that you already know what to expect. Banks have their own SOP when it comes to processing loan applications and disbursing the approved funds. When you apply for bank loans, ensure first hand that you know how the process works so you can have a realistic view on when you will receive a response regarding your application. There are bank loans that can be approved instantly but you may get hold of the information in a week or two after and this is something that you may want to expect in advance.

why choose bank loans