Online banking has become a highly popular way in which to deal with financial matters without having to visit your bank. However, it is also a highly popular way in which to apply for a variety of loans. Everything can be done in seconds online, making instant personal loans for bad credit borrowers a reality.
It might seem at first glance that instant loan approval is impossible to provide, but between electronic access to credit reports, financial and personal information, and the development of computer software specifically to address the needs of the lending sector, approval can be confidently provided in just a few seconds.
But, that is not to say that approval itself is guaranteed. Applicants still need to satisfy set criteria, and prove an ability to repay the loan. So, compiling a convincing application is still essential to getting an unsecured personal loan - and there are some measures to help in that task.
1. Read Your Credit Record
The secret to getting instant personal loans, for bad credit borrowers especially, is to secure and read carefully their credit record in advance. It might seem unnecessary, but knowing how your credit score was reached can help in strategizing to improve the score. After all, once weaknesses are known, they can be strengthened.
There does not need to be a huge improvement on the score to have an impact. Lenders may grant instant loan approval to an applicant with a score of 600, but not to an applicant with 575. By clearing a few minor debts, the score can climb 25 points, to make approval likely.
2. Choose The Right Lender
A second step to aid the chances of unsecured personal loan approval is the choice of lender. Not every lender is the same, even online, with some having hidden charges and fees that only increase the overall cost of the loan. This can make the repayments too expensive, and ensure rejection.
However, some detailed research will always lead to identifying the most suitable lenders. Use the comparison sites to help speed things up, then make a shortlist of the best options, examine their small print and, ideally, contact the lenders directly. Then, getting the best instant personal loans for bad credit is more likely.
3. Meet The Necessary Criteria
No applicant can expect to see their applications approved if they cannot meet the set criteria. Even online application forms have need of specific information and this must be provided. Of course, granting instant loan approval is dependent on a computer program reading the right information, in seconds, and effectively ticking it off again pre-set markers.
The key information relates to income, employment and amount of existing debt. Income must be large enough, and employment be full-time. Finally, the monthly repayments made on existing debts must be below 40% of the income figure. The computer program computes these figures so an instant decision on the unsecured personal loan can be made.
4. Provide a Bank Account
Of course, when approval is confirmed, there is still the matter of getting the funds. When applying over the Internet, the only way to do this is to have the funds electronically transferred into your bank account. That is why, when seeking instant personal loans for bad credit, having an active account is a pre-condition too.
With instant loan approval access to cash can be confirmed as soon as 2 hours after submitting the initial application, though this depends on the banks involved. Bear in mind that the repayments will also be withdrawn automatically from the account on a set day each month.
The advantage is that borrowers cannot forget to pay. So, the risk of defaulting on an unsecured personal loan becomes practically nil.