How to strengthen your loan application

How to strengthen your loan application

Missing something off your loan application can have a big impact. No really, it can. Because when you forget something like an extra form of income, lenders can decide to lend you less money. And that helps no one.

That’s why we’ve put together this guide to making your application as strong as possible. To ensure you get the best rate you can on the amount you want to borrow. So, next time you fill out a loan application, you know exactly what to do.

Improve your loan application in 3 simple steps

Step 1: Make sure you’ve included all forms of income

This might sound like a no-brainer, but missing off additional forms of income is incredibly common. Additional forms of income can include anything from child benefit to overtime. Check our ‘other forms of income’ list on the application form to make sure there’s nothing you’ve missed.

Step 2: Consider a joint application

If you can combine your income with a partner’s or family member’s, you could improve your chances of being accepted for loan. This is because it ups your affordability. So, when a lender looks at your application, you appear a less risky candidate to borrow money.

To make a joint application, give us a call on 0800 432 0142 and our team will help you with the finer details.

Step 3: Think about a homeowner loan

Also known as a secured loan, homeowner loans are only available if you own your own home. This is because the loan is secured against your property. Homeowner loans can sometimes allow you to borrow higher amounts over longer repayment periods. They’re also accessible to people who have less-than-perfect credit scores, so it’s worth checking if you’re eligible.

Although a longer repayment period does mean you’ll pay back more in interest overall, it can reduce the amount you need to pay in monthly repayments, making your borrowing more affordable.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Want to know more about homeowner loans? Read our secured loans guide.

How to improve your future chances of being accepted

As well as improving your chances of being accepted for a loan today, there are also a few things you can do to boost your chances of being accepted for a loan or credit card in the future.

  • Register on the electoral roll
  • Build up a credit history
  • Use a credit card little and often (and pay it off in full every month)
  • Make at least the minimum monthly repayments on any debt owed
  • Use less than 30% of your overall credit limit
  • Close any unused, paid-off credit accounts
  • Open a current account (if you don’t have one)

For more Baffle-free guidance on all things finance, check out our suite of online guides covering everything from the cheapest ways to borrow to understanding credit scores.

Want to get started? Read our guide to improving your credit score.

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Representative 15.9% APR (Variable)

Representative example: If you borrow £7,500 over 5 years at a Representative APR of 15.9% and an annual rate of 15.9% (fixed) you would pay £177.82 per month. Total charge for credit will be £3,169.20. Total amount repayable is £10,669.20. Minimum repayment period is 12 months. The %APR rate you will be offered is dependent on your personal circumstances. Freedom Finance is a leading credit broker and not a lender.

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