If you are in a financial emergency, payday loans are a helpful option. Even though they may have high-interest rates, funds are immediately transferred to you for any urgent situation. This has made them quite popular over recent years.
A quick approval process is one of the major advantages of payday loans. Unlike most forms of conventional loans, payday loans are approved and disbursed on same day basis. Though most payday loans have high approval rates than a regular bank loan, that doesn’t mean approval is certain.
Here are a few tips that will increase the chances of your payday loan being approved:
- Check your credit score
From banks to payday lenders, all lenders will check your credit score before lending you money. Even if they claim credit scores don’t matter, they do. So pay attention to your credit score. The higher your credit score is, the better will be your chances of getting approved. A good credit score will make the process smooth and easy.
- Improve your credit score
Even if you have a bad credit score, it can be fixed. By paying all the bills on time, paying down debts, keeping low credit card balances and so on will help you improve your credit score. If you are determined, you can significantly improve your credit score.
- Report income accurately
Usually, when you needpayday loans, lenders require you to disclose your monthly income. If you meet their minimum income requirement, your application will be considered. But don’t inflate your income for the sake of approval. You should state your income accurately for your request to be considered. Avoid including income from freelancing and other unsteady sources, lenders only care about the money you make from permanent jobs.
- Find a suitable lender
Don’t be discouraged if you have a poor credit score. Typically, payday lenders won’t straightaway reject your application if you have a bad credit score. If you don’t have time to improve your credit score and you need money immediately, find a lender who has a lenient credit check. Some lenders might be willing to extend you the loan even if with a bad credit score.
However, be cautious while seeking loans from such lenders. Ensure that they are genuine and reputed, and not some loan shark tricking you into an unfavourable deal.
- Submit documents timely
You should submit all the documentation required by the lender on time. Failure to do so can delay or even halt your approval process. So if the lender asks for any additional documents, provide it immediately. Also, carefully read your application to ensure that you are submitting everything that’s requested.
- Know your debt to income ratio
Before you request a loan, consider your debt-income ratio. You should compare your monthly income with the loan you need. The loan amount shouldn’t be closer or equal to your monthly income, no lender will agree to that.
Your chances of approval increase when your requested loan amount is only a fraction of your monthly income. So, the lower the figure, the better it is for your approval.
- Be honest
It might seem tempting to state some untrue facts to gain approval, but it can backfire quickly. Remain completely honest on your application. If you lie and the lender finds out, chances are that you will never get your loan. Not only this, the lender can inform others and make it difficult for you to get a payday loan from anywhere. So, submit your application with only truthful and accurate information.
In conclusion, never rush into a payday loan even if you are facing an emergency. Try to think with a clear mind and take your time with the application. If you stay informed about what you’re doing, you’re more likely to be approved.
