Personal Loans
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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

7 Tips To Boost Your Personal Loan Approval Odds

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How to boost your personal loan approval odds

Trying to figure out how to boost your personal loan approval odds can feel a little like grasping at straws. After all, each borrower has their own unique credit profile, and lenders are largely free to set their own requirements.

We’re here to help. You can improve your chances of getting a loan by following the seven tips below.

1. Check the accuracy of your credit report

If you’re having a hard time getting approved for a personal loan, your first course of action should be to check your credit score. Knowing your credit score can show you what parts of your credit history need work and give you an idea of what lenders you might qualify for.

Perhaps most importantly, though, reviewing your credit report will bring to your attention suspicious activity attributed to credit fraud.

For instance, you might find that your score has plummeted due to a newly-opened (and maxed out) credit card. But you haven’t applied for a new line of credit recently. In this case, you could dispute this credit report error. If your dispute is successful, the card will be removed and your good credit will be restored.


Should you consider credit monitoring?

Credit monitoring can be a powerful tool for keeping tabs on your credit health. Depending on the service, you’ll get alerts if suspicious activity is detected, receive regular credit score updates and identity theft restoration assistance if the worst should happen.

2. Improve your credit score

Personal loan requirements vary, but generally, lenders consider applicants with a credit score below 640 as risky. You could still be eligible for a personal loan if your score is lower than this, but you’re likely to be slapped with a steep APR.

Paying your bills in full and on time and keeping track of how many loans you’re applying for are just a few ways to improve your credit score. It’s not an overnight process, but small actions can have a big impact over the long run.

3. Prequalify before formally applying

Hard-credit pulls are something you should avoid if you’re focusing on improving your credit. But how do you avoid those if lenders need to check your credit every time you apply for a loan? That’s where prequalification can help.

Prequalifying for a personal loan before submitting an official application can show you what loan offers may be available to you, and they only require a soft-credit pull. Prequalifying doesn’t mean the lender is guaranteed to approve you, but it’s a low-risk way to shop around.

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4. Work on reducing your debt

Your debt-to-income ratio is another aspect of your creditworthiness that lenders use to determine your personal loan eligibility. If your debt payments are more than 35% of what you bring in, you might have a problem. While paying down a significant amount of debt can be intimidating, it’s not impossible — especially if you have a gameplan.

First, choose a strategy for becoming debt-free that works for you. Pick something realistic and above all, a plan you can stick to long term. You may even want to explore credit counseling, which can give you tools to break any bad financial habits you may have.

5. Find ways to increase your income

This tip isn’t necessarily easy. Depending on your situation, you could ask for a raise or more hours at your current job, look for a new job, or start a side hustle. If you take on a second job, you might be able to include it as a steady source of income, tipping the scales in your favor when it comes to your debt-to-income ratio.

You may also want to explore nontraditional ways to make extra cash, such as selling old clothes or household items you no longer use. You probably won’t be able to claim these one-off cash flow injections as income, but using that extra money to pay down existing debt can be impactful.

6. Don’t apply for too much money

Personal loans can be used for nearly anything. Convenient? Yes. Potentially troublesome? Also yes.

For example, let’s say you need a home improvement loan. It can be tempting to add a couple extra thousand to your requested loan amount to furnish a newly-renovated room. Technically, you wouldn’t be breaking any rules if you did, although you should always double-check the terms of your loan before making purchases.

However, the more money you ask to borrow on a personal loan application, the higher the lender’s risk. If you’re on the cusp of personal loan eligibility, you need to reduce your risk as much as possible. You’ll probably have better luck qualifying for a small loan than a larger one.

7. Adding a cosigner or a co-borrower

Applying for a personal loan with a creditworthy cosigner or co-borrower might be the boost you need, but there’s a lot to consider before taking this route.

If you take out a joint loan, your co-borrower will have equal rights to the loan funds as you. This might not be ideal. And although you would be the only one with access to the funds if you add a cosigner to a loan, your relationship with your cosigner may be in peril if you miss loan payments.

Still, if you’re in a bind and have a friend, family member or business partner with good-to-excellent credit willing to help you out, your personal loan approval odds may be better if you take them up on their offer.

Maybe — it depends on your creditworthiness and the lenders you’re applying to. Some lenders have a minimum credit score requirement as high as 700. People struggling with their credit will find it hard (if not impossible) to be approved by those creditors.

On the other hand, some lenders specialize in bad credit loans tailored toward applicants with less-than-stellar or little credit history. You aren’t guaranteed to be approved, but you might have a better chance of getting a loan if you start there.

If you can’t qualify for a personal loan, you still have options. If you’re comfortable putting down collateral, you could look into a secured loan or a secured credit card. These options can help you build credit so you can get more favorable financing options in the future (such as a traditional personal loan) as long as you make your monthly payments in full and on time.

It depends. Many online loan lenders boast same day approval, but this might be likely if you have a complicated credit history. Brick-and-mortar banks can take longer than online lenders, but maybe not if you already bank with them. Additionally, including a cosigner or co-borrower may extend the approval time, as the lender will need to check two credit histories instead of one.