If you are facing a large or unexpected financial cost such as medical bills, home repairs, or other emergencies, you might be considering applying for a loan. This can be a stressful experience in itself, so of course you want to do all that you can to maximize your chances of having your loan application accepted. It might feel as though the result is out of your hands, but there are a few steps you can take to help swing things in your favor. They will not only assist you in increasing the likelihood of you being offered a loan, but they should also prevent you from having to make multiple applications and negatively impacting your credit score. 

Here are some top tips to help you out.

Apply selectively

Not all lenders are the same, so you need to do your research and only apply to the ones you are most likely to be accepted with. Check each lender’s website thoroughly to find out their specific requirements and how exclusive they are before applying. Similarly, there are lots of different loan options out there, so be sure to only apply for those that are well suited to your needs. Applying for ones that you are very unlikely to be accepted for will only cause you disappointment and also potentially have a negative impact on your credit score – thereby making it less likely other lenders will accept your application. Meanwhile, applying for those that do not suit your personal circumstances might also have a negative effect on your financial situation if you do get accepted.


Some other aspects to consider are the amount of money you apply for and the loan term. Generally speaking, it is easier to get approved for a smaller loan than a larger one, so it is best not to ask to borrow more money than you need. Likewise, a loan with a longer term poses a larger risk to the lender, so is less likely to be approved. Smaller loans with shorter terms are also more beneficial to you, because it means you have less money that you need to pay back and also reduces the total amount of interest that you will pay on the loan overall. 


Whichever product you end up applying for, you should make sure you always go through a regulated and authorized lender to ensure that you don’t sign up to a contract with unfair terms or no protections for the borrower. Likewise, always read the fine print carefully before agreeing to anything. That way you will know exactly what is expected of you in terms of repayments and interest rates. You normally want a loan to be your last choice, so check that you can’t use your savings or reduce your outgoings instead before making a commitment.

Boost your credit score

One big factor that lenders look at when making a decision about your loan application is your credit score. This is what companies use to try and predict your future behavior in terms of making loan repayments or other financial decisions. Therefore, it is a good idea to try and raise yours before you apply. The first step to take is checking your existing credit report to make sure there are no errors – this can take time, so do it well before you apply for a loan. If you find any mistakes, be sure to have them corrected immediately. A quicker change you can make is to ensure that you are registered to vote, and that all the addresses on your accounts are accurate and up to date. Your credit score might affect not only whether your application is accepted, but also what rates and products you will be offered, so it is worth putting the effort in to boost yours. 

In addition, you should make sure that you are not financially linked to anyone who has a bad credit score (for example, an ex-partner), as this can affect yours too – even if you have broken up. The most common financial links are having a joint account, a joint mortgage, or a joint loan. Once those have been closed or paid off, you can ask credit reference agencies for a ‘notice of disassociation’ to ensure that the other person’s credit history does not impact yours any longer. Another factor to bear in mind is that it’s wise not to make too many loan applications in a short period because this can lower your credit score. It may suggest to lenders that you are having financial trouble, and therefore increase the likelihood of your application being considered risky and rejected.

Try and show a steady income and responsible financial behavior

Ideally, a lender is looking for you to have a reliable source of income that will enable you to comfortably afford the loan repayments every month for the entire term of the loan. That means it is not a good idea to quit your job just before you put in your application. It’s also important that you can demonstrate responsible financial behavior over time. For example, this means always paying your bills on time and not maxing out the credit limit on your cards. In fact, late payments are one of the factors that have the biggest negative impact on your chances of being accepted for a loan. If you can pay back more than the minimum repayments on any current debt you have, this can also be an advantage when your application is being considered. 

Finally, if you are concerned that you have no credit history, one tactic is to use a credit card specifically for this purpose, as described by The Balance. There are also programs that can help you to get credit for responsible financial behavior such as always paying your rent on time and avoiding the use of overdrafts. Debt consolidation is another option for those who have lots of different credit debts or loan repayments and are struggling to keep up with them all, though be sure to check whether or not this is the best option for you before going ahead.

Published on Holr Magazine