How do lenders assess creditworthiness for quick loans?

If you end up in a tricky financial situation, a quick loan can help you get back on your feet and manage your bills. While you might be worried that your credit score might impact your ability to get your loan approved, the general notion of “creditworthiness” (aka your credit history) isn’t always taken into account in the same way it would be with another type of loan (such as a mortgage or bank loan). While it’s still important, instant loans UK aren’t out-of-reach for those with a less-than-ideal credit score.

Typically, lenders will also take other factors (such as your income and financial obligations) into account when assessing your loan application, and you can still get a loan approved if you have a bad credit score. Plus, we work with plenty of lenders who specialise in quick loans for those with poor credit, so you won’t be excluded on that basis alone.

In this blog, we’re going to take a look at how lenders assess creditworthiness for quick loans, and whether a bad credit history will prevent you from securing one. Let’s get started!

What is a quick loan?

Also known as a payday loan, a quick loan offers you the possibility to be loaned a fixed cash sum (usually between £100 and £5000) which you’ll usually have access to on the same day your application is approved.

Unlike traditional loans, a quick £100 loan is typically repaid within a shorter time frame, although repayment terms will vary from provider to provider.

What are the benefits of a quick loan?

Being in financial difficulty is always stressful, but here’s how a quick loan can help you get back on top of your financial obligations:

Instant pay-out

The main benefit of quick loans UK is that they’re usually paid out as soon as your application is approved; this means you can pay any outstanding arrears and get back on top of your finances as soon as possible.

Flexible lending

While quick loans are designed to be repaid faster than a traditional loan, many quick loan lenders offer flexible repayment terms, so you can repay your loan without a considerable negative impact on your day-to-day essential spending. In general, a quick loan must be repaid within 3-36 months.

How do lenders decide creditworthiness for a quick loan?

If you’re looking into applying for a quick loan, here’s what lenders will usually look out for:

Your income

In order to obtain a quick loan, you need to have a steady income that will allow you to repay your loan on time and in full, per the time frame laid out in your credit agreement. Lenders will assess your monthly income, and determine whether you have enough money to cover your loan repayments (including interest) without the repayment plan significantly impacting your day-to-day finances.

Your financial obligations

Another factor that lenders may take into consideration are your financial obligations; this can include dependent children (as well as any other dependent family members) as well as any outstanding arrears (such as your mortgage, rent, or any other expenses that you may need to pay).

Your credit history

All quick loans and UK payday loans will involve a credit check; this is absolutely essential in order to prevent individuals from accumulating unpayable debt and landing themselves in difficult financial situations. Lenders will look out for any missed loan repayments (for example, missed mortgage payments) as these increase your chances of non-payment.

While a bad credit history won’t prevent you from

How do I get a quick loan approved?

If you’re hoping to secure a quick loan to help you get back on top of your finances, here are some important tips to keep in mind:

• Aim to borrow a reasonable amount. While it can be tempting to opt for a higher sum, quick loan direct lenders are much more likely to loan you a reasonable sum that you won’t struggle to pay back. Your requested loan sum shouldn’t be entirely disproportional to your income; opting for a much higher figure could make it difficult for you to repay the sum on time. Only ever borrow a sum that you can afford to pay back.
• Get your finances in order. Lenders will respond much more favourably to your credit application if they see that your finances are in order. Naturally, this isn’t always possible if you’re dealing with a financial emergency, but small things such as keeping down your overdraft, or keeping up-to-date on credit card payments can make a difference.
• Shop around for the best option. With My Quick Loan, we can help you find a suitable provider no matter your credit history. Our online application process can be completed exclusively online, and you’ll be able to compare rates and offers from various established UK lenders – with no obligation to accept a credit agreement. If your application is successful, you can even get access to your cash on the same day.