An unsecured loan is a loan that is approved without any collateral attached. The lender takes on a lot more risk with this type of loan and because of that, there are certain terms you might have to agree too before the cash is paid out to you. One of the biggest pitfalls of unsecured personal loans is that they often come with a high interest rate attached.
When you are in dire straits or faced with unaffordable or unexpected expenses, a personal loan might be the only option for you. Before a bank or lending institution can approve an unsecured loan, they need some sort of reassurance that you can pay it back. To determine this, several factors are taken into consideration including (but not limited to), your credit score and the outcome of your affordability assessment (your debt-to-income ratio).
You know that a personal unsecured loan is the best option for you, but how do you ensure that your application is approved, especially if you have no collateral to offer? That’s the tricky part and we have 5 tips to share with you, to improve your chances of getting the cash loan you need.
1. Pay your bills on time.
This might not seem like an immediate fix, and it’s not. By paying your bills on time, you will develop a good credit record and this is something that banks and lenders look at. If you show that you can be responsible and pay your accounts on time, every month, your application will be viewed more favourably. Having a good credit score also often means you will be offered a lower interest rate.
2. Show you have a stable income.
Lenders want to know that you are earning enough to pay the installment each month. For this reason, you should include as much detail regarding your income as possible. Don’t just provide your payslip as proof. If you earn any extra money with a part time job or through a side hustle, make sure that you provide those details too.
3. Share the load with a creditworthy friend.
If you have a creditworthy partner, friend, or family member who is willing to co-sign on a personal loan with you, your application will be viewed more favourably. The co-signatory will be confirming that they will pay back the loan amount if you are unable to come up with the payments.
4. Apply with the right lenders.
Not all lenders are the same. Some might turn down your application, while others will give your application and financial status a broader overview. Research which lenders are the most sympathetic while still operating in strict accordance to laws and regulations in the industry. It’s strongly recommended that you first apply for instant cash loans with Multimonthloans.co.uk, if you want the best possible deal and a quick turnaround time on your application.
5. Be honest!
During an affordability assessment you will be asked to make a note of all of your expenses and income. If you fib on this assessment, you could be caught out quite easily when the loan company checks your bank statements or other supporting documentation. Be as honest as possible and don’t expect to loan more than you can realistically afford to repay.
Follow these 5 simple tips to improve your chances of getting an unsecured cash loan as quickly as possible.