How Do Lenders Determine Who Gets A Loan?

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Loan services are still very much in high demand. That’s because our cars won’t stop breaking at the most inopportune times, unexpected bills won’t stop coming through our door and surprise washing machine malfunctions won’t stop happening. Plus, there is then the fact we need a helping hand with home and business purchases! At some point, we’re all stuck in a difficult financial situation. That’s why loan lenders are much-needed friends (with interest). But perhaps you’re wondering how exactly they’ll determine if you are eligible for a loan? Perhaps you’ve had some bad credit in the past and are worried about how much that will factor in?

Why Lender Approve And Reject Certain Applications

Lenders like Blutin Finance brokers may accept or reject your application for a number of reasons. Every lender, irrespective of them being an online mortgage lender or not, is required to perform checks on both the creditworthiness and affordability of all of their applicants. So while lenders will scrutinise your applications, they will also perform checks on your credit history. 

A customer’s credit file will detail how much the customer pays each month towards their credit commitments. It will also show whether they are paying these commitments or not. However, different types of credit reference agencies will give different reports that will contain different types of information. Either way, these files will be able to validate both your income and your expenditure. Missed payments, particularly recently missed payments, are indicative of a customer being at a point where they may be unable, or have no intention, to repay the loan. So it’s important to be honest in your application. If you’re not, you could end up costing yourself the services of an understanding and compassionate lender. 

Bank statements or payslips may also be requested to see if everything in your application matches up with the credit check. From this point on, the affordability of the applicant can be calculated using all the available information. But what if you’ve had poor credit in the past?

The Best Loans For People With Bad Credit

Ideally, the best loans for people with bad credit are those with no checks. However, as we’ve stated, this is no longer possible due to legislation. If you see a lender advertising such a claim, think twice. Your best bet for a loan would be to find a lender who doesn’t care so much about your past credit history. This is further helped when you can prove that your current credit is good in comparison to your poor credit history of the past. A lender will then be able to see that you’ve improved your credit standing and will be far more likely to consider you as a potential borrower. At the end of the day, a lot of people who apply for cash loans don’t have perfect credit histories. So you wouldn’t be alone if that’s the case for you. Some lenders are more concerned with your ability to prove you can repay the loan.

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