When you need cash fast and you’ve run out of financial resources, it might be time to apply for a personal loan. As you research your options for personal loans, you should consider whether you’ll meet all of the application criteria established by lenders.* One of the obstacles that could prevent you from qualifying for a new line of credit is your credit score. Since lenders have different qualification requirements, your credit score might have more or less of an impact on your chances for approval than you think.
Here are common concerns about credit and applying for a personal loan:
Does the lender’s credit check threaten your approval?
To assess your ability to repay a loan, lenders for installment loans, such as personal loans, may ask for permission to look up your credit report. Contact a potential lender when shopping around to ask if a credit check is required to apply for the loan. Find out to what degree it impacts approval. This could increase your chances for rejection in case you do not fit the credit profile lenders prefer. If the lender does require a credit check, you may have to raise your score to improve your credit standing, which requires time. If you need fast cash, this may not be feasible. Lenders like LoanMe believe there is more to a borrower than one credit report. They assess the full application, and are committed to exhausting all efforts to get applicants approved, if possible.
Do you meet strict credit standards or require collateral?
Another factor that could influence your chances for approval include lenders’ credit criteria. Lenders will not only evaluate the strength of your application based on your credit score, but also the key components that make up your credit report, such as the age of credit accounts or history of making payments on time. Whether your score dropped because of a single late payment, or from a default on previous credit obligations, these negative marks will weigh heavily with some personal loan lenders.
Additionally, when applying, you may have to submit proof of employment and income, which will help lenders decide whether you will have the funds available to repay a personal loan, as well as put up collateral in case you do not pay on time.
Options for alternative lenders
Before applying for a personal loan with a traditional financial institution, consider loan options with alternative lenders. This can help avoid rejection due to a low credit score. A lender like LoanMe has a simple application process for an unsecured installment loan that does not require collateral.
Alternative lenders that specialize in personal loans for people with bad credit understand that certain circumstances in the past may have led to a low credit score, but this does not have to prevent you from qualifying for new credit. According to Experian not only can an installment loan help pay for unexpected costs or bills, but it is also an important tool to improve your credit.
Apply for unsecured personal loans at LoanMe by calling a customer representative or filling out a loan application online. The online application takes minutes to complete, requiring just three documents: bank statement(s), proof of income and a valid form of ID.
*This article has been prepared for general information purposes only. The information presented is not legal, financial, tax or accounting advice, is not to be acted on as such, and is subject to change without notice. Credit approval is subject to LoanMe’s credit standards, and actual terms (including actual loan amount) may vary by applicant. LoanMe requires certain supporting documentation with each new application. If you have any questions regarding this, call us at 844-311–2274. California loans are made pursuant to LoanMe’s California Department of Business Oversight Finance Lenders Law License #603K061. LoanMe also offers loans in certain other states which may have higher minimum loan amounts. Copyright © 2015 LoanMe, Inc. All rights reserved.