How to Apply for a Loan Online – Everything You Need to Know
There was a time when you need to visit the branch of a lender or credit institution to process your application for a loan. Gone are those days because now, you can do so at the comfort of your own home. All you need is a computer or laptop (or even smartphone!) and an internet connection. You can apply for a loan online and all other processes involved can be done online, as well (such as releasing of funds once approved). If you are new to this, you will find all the information you need to now on how to apply for a loan online.
What you need – How to Apply for a Loan Online
When talking about applying for a loan online, it is important that you have all the necessary documents required by your lender. While the process is done online, the steps are basically the same. Your lender will require documents to provide proof of your personal and financial information. Among the documents needed are your personal record (such as date of birth), personal identification (IDs), proof of address, proof of income, bank details or statement, and credit score. If employed, you might also be asked to provide proof of employment.
As already mentioned, you need to provide proof of your credit score, as well. It is important that you showcase your good credit standing (if you have a high credit score) as this will speed up your application process. Lenders see borrowers with good credit score as being more creditworthy so they are less of a risk as a borrower as compared to those with poor credit.
When submitting your credit report, it is important that it is free from any mistakes that could negatively impact your credit score. Make sure there are no errors on the report or items that shouldn’t be there. It also helps when you meet the minimum income requirement for the loan (or for the amount that you are asking to borrow).
Most lenders in the UK allow applicants to be at least 18 or 21 years old to apply for a loan.
Eligibility Criteria for Online Loan
The eligibility criteria are a set of rules and requirements that the lender has specified for the loan. All applicants must satisfy the eligibility criteria in order to be approved.
For instance, lenders will specify how much the borrower should earn as income to qualify. They also should be of a certain age or must have a specific credit score (or higher). These thresholds are in place to make it easier to lenders to assess if an individual borrower will qualify or not.
If you fail to meet the eligibility criteria, then you will unlikely be approved for said loan.
The Process for Online Loan Application
As already mentioned, loan applications can be processed online or in a branch. But due to the accessibility and convenience, many UK lenders have opted to operate online. It also streamlines the application process because there is less paperwork involved and processes can be done in minutes.
Be careful with whom you deal with online. There are many fake lenders who will try to get you to pay money to guarantee fast approval, especially on individuals with low credit score. If you provide your personal and financial information to these fake lenders, your information could be compromised. Always start by doing a research of the most reputable lenders in the UK. Look out for the tell-tale signs of online scams and make sure that the website is encrypted so your information cannot be stolen. No lender can also promise you to get a loan approval without credit check because this is against the law!
Better yet, you can work with a loan broker online, such as Money Pig. We only work with reputable and certified UK lenders to include in our panel of lenders. This is how you can ensure that you are applying to established lenders who will not try to scam you. It also saves you time from not having to do more research!
All you have to do is complete your online application form. This form is designed to gather information about your personal and employment details, as well as the amount you wish to borrow for the loan. By sending your application form, you also give the lender permission to perform a credit check on your account.
During the credit check, the lender will assess your creditworthiness. You can be categorised as either a risky lender (for those with low credit score) or not. They will also run a fraud check to ensure that you have provided accurate information about yourself. Make sure to be honest when providing your information during your application.
Based on the above two steps, the lender will make a decision to approve you or not. If they do approve your loan, they might charge you with an APR that is different from one that is advertised. The interest rate is determined based on your creditworthiness and your financial information. They will assess it based on your risk factors and compute the interest rate accordingly.
Once you get their approval, you can decide to accept the offer or not.
Tips Before Applying for a Loan Online
If you want to speed up the process of your loan application or increase your chances of approval, there are steps you can take to ensure that you get the loan.
The first step is to work on improving your income. Your salary or income is one of the factors that lenders will look into to assess if you can qualify for a loan (or not). You must check the income sources that are accepted by the lender before you apply. If you are not earning your income from employment, there are a variety of accepted income sources such as business profits, maintenance payments, benefits payments, overseas income, reimbursement for expenses, and rental income, among others. Not all lenders will accept the aforementioned income sources so you have to verify whichever applies in your case, if you are have no income or is not employed.
In some cases, you might even be required to provide other sources of income to supplement the current one. You will also be asked to provide a copy of your bank statement to evaluate your financial capacity. Keep these documents ready as you might be asked to provide them!
Another tip you can use before applying for a loan online is to get a quote from lenders. The quote will indicate the possible amount you qualify for and the estimated interest rate. This will help you determine if you can afford the monthly repayments and the interest rate on the loan. To do this, the lender will conduct a soft credit check, which will not impact your credit score at all. It is also referred to as a ‘soft quote’ so expect the actual loan amount and interest rate to vary once you submitted your full application.
What to expect after your loan application?
Once you have submitted the application for the loan online, you can accept or reject the offer made by the lender if you are approved. If you accept the offer, you must sign a loan agreement. This loan agreement details the interest rate you agreed on and the length of the repayment period. It will also indicate the monthly payments you will have to make for the loan.
Once the lender has received the sign loan agreement (which can be sent online), they will automatically transfer the approved amount to your bank account. This is why they will also require applicants to provide details about their bank account during application. This can be done within hours after approval or up to 48 hours.
FAQs on How to Apply for a Loan Online
Are you looking for more information on how to apply for a loan online? This is a list of the most commonly asked questions and the corresponding information you need to know:
- How do I apply for a loan online?
- Are online loans legit?
- What is the best online loan for me?
- How can I get an online loan instantly?
- How can I get a quick loan?
- Can I get a loan without income proof?
- How can I get a loan with poor credit?
- How do you get approved for a loan?
- How much personal loan do I qualify for?
- Are online loans safe?
- Can I get a loan online with bad credit?
- What can you use an online loan for?
- Will applying for a loan affect my credit score?
- Can I get a loan if I’m self-employed?
- Can I apply for more than one loan at once?
- What should you do if your loan application is declined?
- How can Money Pig help me secure loan online?
Applying for a loan online is very fast and efficient. Depending on which lender you are borrowing from, it only takes a few simple steps to complete your application. The requirements will also vary from one lender to another. All you have to do is visit the lender’s website and compile the list of documents that are required for the application. Once you submit all the necessary documents, most lenders will have an approval decision within 24 to 48 hours. If you are approved, you should have the funds deposit to your bank account instantly or within hours.
Yes. Online loans are legitimate, as long as they are provided by legitimate lenders in the UK. It is always a good practice to do a research of the lender before you pursue an application with them so you don’t waste your time and effort. If you can also use online loan brokers, that would be to your advantage because you can streamline the process and guarantee that you are dealing with a legitimate lender.
The answer to this question will depend on your needs and eligibility. There are various types of loans that you can apply for online so you have to determine the following: the purpose of the loan, the amount you need, and your qualification. There are also online loans available that are unique to every individual’s situation, such as those loans for people with bad credit or loans for self-employed individuals (or no income).
If you need to avail of online loan instantly, you can do a quick search on the internet for providers for small and quick cash loans. There are many options in the market with some being able to release funds within the same day. Make sure to take extra precaution when dealing with these types of lenders to ensure that you work with legitimate ones. Depending on your qualification, you can get fast approval in the same day with low interest rate.
There are plenty of options for anyone looking for a quick loan online. However, the amount of money that you can borrow from these types of loans is relatively smaller in value. If you are interested, you can compare quotes from various lenders to see the amount that you may be able to borrow from them.
Yes, it is possible for individuals without income proof or job to obtain a loan online. Make sure to look for personal loans or loans that are provided for self-employed individuals. The requirements vary from one lender to another but some require a higher credit score or financial information to prove your ability to pay (even without income).
Getting approved for an unsecured loan is difficult if you have poor credit. In some cases, lenders will require a co-signer with a good credit score to approve your loan. If lenders do not require a co-signer, then you will most likely get a high interest rate on your loan, if you do get approved. It is possible to find these lenders if you search for ones that are specifically dealing with people with low credit.
Getting approved for a loan could be easy or hard, depending on your credit score, as well as your personal and financial information. If you want to boost your chances of approval, you can start by cleaning up your credit. The higher your credit score, the better your chances of approval.
It is also a good time to rebalance your debts and income. Loan providers will be looking at your annual income and debts when evaluating your loan application. It is also important to be realistic about the amount of money that you want to loan. Make sure that you can afford repayments, including the payment for the interest rate.
Finally, choosing the right lender is the key to getting approved for a loan. Make sure you do your research to find a lender for your financial situation (such as if you have poor credit or no income).
The amount you can borrow for an online personal loan will vary significantly from one lender to another. The creditworthiness of the borrower is also a huge factor. The lenders will evaluate your income source and your credit score to come up with an amount that is most viable for you (to ensure that you can afford its payment).
If you want to know how much you can borrow, most online lenders in the UK have a loan calculator in their website. Use this tool to calculate the amount that you could potentially qualify for based on your credit score and salary (or other sources of income). Another option is to ask the lender for a quote.
In general, online loans are safe provided that you get them from reputable lenders in the UK. There are also many banks and credit institutions in the UK that have opted to provide online loans to streamline the application process for interested borrowers.
To ensure your safety, do a research on the lender first. There could be many fake lenders who set up shop and try to exploit on individuals who are desperate for money. Be wary of those lenders who charge you fees before they approve your loan.
Yes. There are many loan providers in the UK that are willing to work with individuals who have bad credit. It is important that you specifically search for these lenders as they impose loan requirements that are less stringent than other lenders. Just make sure that you choose reputable lenders in the UK to ensure that your information is not compromised and that you can get the funding that you need.
The only downside to choosing lenders that specialise on people with bad credit is that you can expect to pay for higher interest rates on the loan.
There are several possible uses that you can get from the money that you borrowed via an online loan. Most lenders will require you to provide a reason for the loan and it can be anywhere from making home improvements, debt consolidation, purchase of vehicle, or other personal expenses. Unless the loan you are applying for has a specific category to it, such as a home loan or home improvement loan, it does not really matter what the purpose of the loan is.
Yes. Applying for a loan will have an effect on your credit score although the gravity of its impact to the overall score varies significantly. When you apply for a loan, lenders will conduct a credit check. Some will conduct a soft check while others will perform a hard check. When lenders perform a soft check, it does not have a significant impact on your credit score but hard checks do.
When there are too many credit inquiries on your credit report, it can impact your credit score. It will also impact your ability to obtain credit in the future.
Yes. Employment is not the only way to qualify for a loan. Self-employed individuals can also get approved as long as you can provide proof of income or ability to pay off the loan.
Yes, it is possible to apply for more than one loan at the same time. But do consider it before you do as it could definitely hurt your credit score. When you do this, it can also indicate that you are desperate for credit and it could impact your creditworthiness negatively. If you do this, it can hinder your chances of getting approved for a loan in the future.
If your loan application was declined by the bank, you can ask the lender the reason for that. It is also a good idea to check your credit report (if you have not done that prior to application). If there are any mistakes, you can correct them as they can cause a negative effect on your credit score.
Ideally, you need to wait for at least 3 months before you send your application for a loan again.
If you are looking for online loans, Money Pig can help you out. As the top online loan broker in the UK, we can refer interested applicants to a panel of lenders and receive feedback on your application within hours or in a short period of time.
We use the borrower’s information to find the right match among our panel of lenders to simplify your search (or eliminate this step in your application). All you have to worry about is to secure the required documents for your application. By taking care of this step, Money Pig ensures that your chances of approval are improved significantly.
The best part of using Money Pig is you can guarantee that you are working with legitimate lenders in the UK. No more dealing with scams or fake lenders!