Easy Approval Debt Consolidation Loans

We often get asked where one can find personal loans with easy approval. While no lender can guarantee someone will be approved many creditors these days have widely different requirements. Some check the standard credit report sites like Equifax and TransUnion, and others elect to verify only that one has an income.

Some lenders are much more willing to lend to those with bad credit than others, it really just comes down to the specific lender. Let us answer the most basic questions regarding easy debt approval for individuals with poor credit.

Who Can Apply For A Loan?

To be eligible for a loan the recipient must be at least 18 years of age. The second, which should come as no surprise, is the individual must have a verifiable income; a way to pay back the loan. $800 per month is the base requirement but many lenders prefer a recipient who earns at least $2000 a month. That being said, the requirements do vary.

How Does Credit Score Affect The Loan Offer

It should go without saying that those with a bad credit score are offered fewer loans at higher interest rates than those with high credit scores. While this is the case, many options exist these days for those with bad credit scores. Below is a brief outline of what those with bad credit scores can expect.

  • 550 and above: A personal loan is likely to be the best option here. Personal loans are not terribly difficult to get at this credit level.
  • 480-550: The best option is to attempt a pre-approved personal loan first. The pre-approval process uses a soft credit check so it will not affect one’s credit score. If denied the last option may be a payday loan for this credit score level.
  • 480 and lower: Most lenders will not approve loans for people with this credit score, although one can still attempt to view their pre-approved options as it will not affect their credit score. If no loan can be secured, improving one’s credit is the next step. Payday loan options are still available.

No Credit Check Loans and Easy Approval Debt Consolidation Loans

As the name implies, no credit check loans are loans where the lender does not undergo a thorough review of one’s credit history. While the name may be enticing to those with bad credit, no check loans do not truly exist. All direct lenders perform some kind of check, even if it is just to verify that the borrower has an income. This type of check is called an alternative credit
Check. Alternative checks are most commonly associated with payday loans, which is something we highly advise against as it usually leads to a cycle of taking out new payday loans to pay off the first one.

3 Main Types of Credit Checks

  1. Hard Credit Check: Performed after the pre-approval process is completed. It is a more in-depth look at one’s credit and financial history. Hard credit checks do have ann effect on one’s credit score.
  2. Soft Credit Check: Used for pre-approval checks and for checking one’s own credit score. Does not have an effect on credit score
  3. Alternative Credit Check: Most common with payday loans, but not limited to payday loans. Essentially, the lender only checks that the borrower has a legitimate source of income.

Options For Bad Those With Bad Credit

It may be the case that one’s credit score is simply to low for most lenders, or their credit score prohibits them from securing a loan with terms that makes sense for them. In this scenario, the only solution is to improve one’s credit score. Let us go over several methods one can use to improve their credit score.

Lowering Credit Utilization Ratio: While one’s payment history does make up a very important part of their credit score, it is not the sole determining factor. Credit Utilization Ratio is also a major factor that lenders look at.

Put simply, how much of one’s available credit have they used? The less of one’s total available credit used to more attractive they will look to prospective vendors.

Lower Income to Debt (DTI) Ratio: The less of one’s monthly gross income that goes towards paying off debts the lower their DTI ratio will be. A low Debt to Income ratio is heavily favored by lenders as it means an individual has the capacity to take on more debt.

Consider Balance Transfers For High-Interest Credit Cards: Most Credit Card companies offer specials on balance transfers. These specials usually allow the individual to go interest-free for 6 to 12 months. This interest-free period can be very helpful in paying down principles on debt.

Applying To More Than One Lender: As stated above, soft credit checks do not poorly impact one’s credit score. Because of this, borrowers can apply at various lenders to see what options are available.

Split Loan Into Multiple Loans: Securing larger loans with poor credit can be difficult, for this reason, it may be productive to apply for two smaller loans. For example, an individual may be seeking a $20,000 consolidation loan but their credit score is to low to secure that amount from a single lender. Applying for two $10,000 loans is likely to yield better results.

How Much Can One Expect To Borrow: As a general rule, lenders strongly prefer that your total debts be at most 200% of your yearly gross income. For example, a person earning $50,000 per year before taxes can comfortably borrow $100,000 providing they meet the lending requirements of the lender.

The Debt Snowball Method: A debt reduction strategy in which the smallest balance is paid off first, with only the minimum payments being made to all other debts.

The Debt Avalanche Method: A more aggressive debt reduction strategy. The debts with the largest balance and highest interest are targeted first. The aim here is to reduce the amount of interest which is paid.

Leave a Reply