When you need money for an emergency, you tend to receive money as fast as possible. No matter how quickly you want to obtain funds, there is no magic wand that a lender will wave and money will be transferred to your account. Whether your car has broken down or you need money to pay off a medical bill, the loan process takes a couple of hours. It includes a submission of your application form, a perusal of your credit check, and an evaluation of your affordability.
However, sometimes applications are turned down. There could be several reasons for a lender to repudiate your application. There are certainly a few steps you should take to lower your chances of being rejected. When your application is not refused, you will not have to apply to multiple lenders, which saves time and effort.
This blog discusses how you can get a guaranteed loan approved fast, but before that, you must know what exactly a guaranteed loan is.
What is a guaranteed loan?
A guaranteed loan implies a loan that is certain to be approved regardless of your credit history and financial condition. As a matter of fact, guaranteed loans do not exist at all. On no account can a lender approbate your application without running an affordability check. It is absolutely a stratagem to attract many borrowers in order to make profits.
When you come across some lenders claiming to provide guaranteed loans, it is a red flag. Such lenders cannot be authentic and registered. They would charge very high interest rates. These lenders, in fact, require you to settle your debt in one fell swoop. Since interest rates are quite high, you might find it difficult to repay the debt on time.
Falling behind on the payment means rolling it over. As a result, the cost of the debt will keep accumulating over time. Eventually, you will fall into an abyss of debt.
Ways to improve your chances of getting a loan fast
Here are the ways to improve your chances of getting a loan fast:
Keep your credit score in good condition
Whether you believe it or not, you should try to keep your credit score in good condition. A lender will check your credit history in order to determine your repayment capacity. Your credit score is an acknowledgement of your payment behaviour. If you try to pay your bills off on time, it shows that you are a responsible borrower. However, if your credit report consists of too many missed payments and defaults, it reflects that you are an irresponsible borrower. Chances are, you will make a default this time, too.
Try to keep your credit score in good condition. Even if it is bad, it must not be extremely poor. In order to keep your credit score in good condition, you should try to ensure that you do not miss payments. In addition, do not owe too much money. It could make it challenging for you to clear your debt.
Lower your debt-to-income ratio
A debt-to-income ratio does not affect your credit report directly, but it is an important factor that influences lenders’ decisions. For instance, if you are looking to take out urgent loans for bad credit from a direct lender, they will check how much total debt you owe against your income. A high debt-to-income ratio is not perceived as a good sign, even though you have been keeping up with payments.
Your lender will be sceptical about your repayment capacity and most probably refuse a loan. It is enjoined that you should keep your debt-to-income ratio as low as possible. It should not be higher than 30%.
Borrow a small amount of money
Lenders charge subprime borrowers high interest rates. As a result, the total cost of the debt is unexpectedly high. They might be indisposed to lend you money as you had not been loyal to your commitments in the past. In order to speed up the application process, you should try to borrow a smaller amount of money.
A lender would be willing to lend you a small amount of money when your credit report is not so perfect. It is still important that your score is not lower than the bare minimum that lenders follow. For instance, if you have applied to a lender who does not accept applications with a credit score of less than 400, make sure that your credit rating is at least 400. Otherwise, you will be rejected on the grounds that your credit score does not match their approval criteria.
Have all documents ready
While a credit rating plays an essential role in determining your affordability, your lender will also check your income sources. Your credit score reveals your loyalty, but your income reveals your repayment capacity. Just because your credit score is stellar, it does not insinuate that you will be able to settle your new loan on time, too. A lender would get this information by checking your income sources.
They will require payslips and a bank statement for the previous six months. Lenders ask for soft copies of these documents after initial-stage approval. Make sure that you keep all documents ready in advance. This will save immense time during the loan process. Having all these documents ready will help you have your loan application processed faster than ever.
Consider a lender with soft credit checks
Your loan application can be processed faster if you borrow money from a lender that runs soft credit checks. Soft checks are made only to know about your address and other details, but they are as thorough as hard checks, and they do not pull your credit report. It takes less time to process a loan application.
The final word
You can obtain a loan fast if your credit score is not extremely bad, your repayment capacity is strong, and you do not borrow more than your affordability. You should always try to keep your overall financial condition good.
