Applying for a loan can be incredibly stressful and time consuming. Although you don’t need to visit a local high street bank anymore in order to take out credit, even online applications can be challenging. You can spend hours comparing lenders, and then you may not even be approved by the first lender you try, and have to start again.
As a broker service, we may be biased, but the answer to these difficulties seems to be to approach a credit broker. They can do all the hard work for you, comparing lenders and interest rates, and then putting you in touch with the lender most likely to approve your application. And if you use a free service, like the one offered by My Financial Broker, you really have nothing to lose!
Whether you opt to use a broker or apply with a lender directly, there are a few things you should know about applying for a loan. We’ve gone through the key details below, to help you get the funds you need as smoothly as possible.
How Long Does it Take to Apply For a Loan?
How long a loan application takes will depend on what type of loan you’re applying for. A mortgage application is obviously not a short process, whereas if you are making a payday loan application, it shouldn’t take more than a few minutes to complete.
You can often speed up the process by having essential information to hand, such as details of your income and expenditure, as well as your bank details. You will also be asked for some personal information, but you’ll probably know things like your address already, unless you’ve just moved house!
In terms of how long it takes for the funds to be paid into your bank account, this can again depend on the sort of loan you’ve applied for. Many long term loans will take three days to clear in your account after approval, whereas most short term lenders aim to pay out the money within a few hours, or by the next working day.
If I Apply For a Loan Can I Cancel It?
Of course! Almost all lenders (mortgages are slightly different, for example) have to offer a cooling off period, though the length of this can vary. If you cancel a loan, this will mean that the loan shouldn’t appear on your credit report, but you will obviously need to repay the funds borrowed, and any interest applied during the cooling off period.
It is important to keep in mind that some lenders charge an early repayment fee. So if you miss the cut off point for the cooling off period, you may need to wait until after the early fee period to repay the loan, unless you want to be hit with this charge. Early payment fees are more common with long term loans – most short term lenders don’t charge a fee should you wish to make a payment early.
- Using a broker service can save you time and frustration
- Short term loan applications shouldn’t take more than around five minutes to complete, but other credit applications can take longer
- Loans should have a cooling off period, so you can cancel them in this time if you want to – just make sure there are no early payment fees
- A lot of hard searches on your credit file can affect your score, but soft searches don’t leave a footprint
- There are a number of lenders that specialise in poor credit history loans, from bad credit mortgages to guarantor loans. Short term lenders in particular will consider all credit histories when you make an application
How Much Does Applying For a Loan Affect Your Credit Rating?
When it comes to making a loan application, the lender or broker can undertake either soft or hard searches on your credit file to determine your creditworthiness. A hard search will leave a footprint on your credit file, whereas a soft search won’t.
Too many hard searches on your credit report in a short space of time can have a negative impact on your credit score. That’s why making lots of loan applications at once, to see which lender will accept you, isn’t a good idea. Making as few applications as possible can actually help protect your credit score, which is the reason a lot of people use broker services.
My Financial Broker, for instance, only use a soft credit search, and we’ll then put you in touch with the lender most likely to approve your application. So you won’t have more than one hard search on your credit report, which shouldn’t really affect your score.
How Can I Apply For a Loan With Bad Credit?
Who to approach for a bad credit loan will depend on what type of loan you’re looking for. In regards to long term loans, you may need to find a lender that specialises in a particular type of loan, such as a bad credit mortgage lender. Broker services should also be able to help, and put you in touch with a suitable lender.
With short term loans, a lot of lenders will consider your loan application regardless of your credit history. Short term lenders understand that nobody has perfect credit, and are more interested in things like your income and expenditure than your credit file. As long as you can comfortably afford to repay the loan, you should be able to get the funds you need.
If you’re looking for a bad credit loan, or any other type of short term credit, My Financial Broker can help you get a loan of between £300 and £5,000. Our application process is straightforward and shouldn’t take more than a few minutes to complete – we’ll then match you with a suitable lender. All quotes are no obligation, and our services are completely free.