February 15, 2021
Bad credit situation is the baggage of insecurities because the bad credit loans become extremely important. But unfortunately, the insecurity of loan rejection always accompanies us, and we seek tools that can help us get rid of this issue.
Pre-approval is the best tool to gather security against the rejection of loans for bad credit in Ireland. But how does it work and what options you get with pre-approval? Every information in one blog for your enhancement and attention on this part.
What is a pre-approval bad credit loan?
A loan pre-approval is an acceptance before the money transfer to the borrower. The approval is of a decided amount which ensures that borrowers eligible for a certain amount.
How pre-approval works?
Here is a quick look at the nature of the pre-approval process in the loans –
- A pre-approval works in the same way whether it is about a bad credit situation or good credit situation.
- The lender takes the basic financial information of the borrower to know the repaying capacity of the borrower.
- There is no deep study about personal finances, and the past payment records are not scrutinized.
It is only about the initial pre-approval, which takes only a few minutes and a few hours in long-term loans. When it is about bad credit, the lender may take a bit more time.
What happens after a pre-approval?
After a pre-approval, if the applicant accepts the agreement, the finance company moved forward with a detailed study of the personal financial conditions. This may include the attention to the complete past payment record and also the current income situation.
The applicant needs to prove the repay capacity according to the detailed financial scrutiny of his/her records. This can be called as the final moment or stage for the fund seeker.
Can a lender reject the pre-approved bad credit loan?
Of course, a lender can do that part of its legal right. As you can read above, a pre-approval is given while taking a glance at the personal finances of the loan applicant.
Later, when the applicant accepts the loan agreement, the lending company takes a deep look at the current and past financial circumstances. During this scrutiny, if the loan provides finds that the poor credit borrower has weaker repayment capacity, it can reject the application.
Usually, when people apply for the money with less or incomplete information, rejection happens. If you are also careless on this part, you need to understand. If you need money fast in Ireland despite a poor credit score, you need to be very conscious of this part.
What is the use of bad credit loan with pre-approval?
A pre-approval is a very useful tool, and it is majorly used for two prime purposes, and both are for the well-being of the borrowers.
- To get surety of pre-approval – We all know how insecure it feels when we apply for a loan, especially in a poor credit situation. Rejection is considered as the evident destination for those in poor credit situation. Pre-approval is humble support that gives the hint of the promising chances of money transfer. Although, it happens only after scrutiny at the final stage even though the borrower has at least a reason to smile.
- To get time to find other loan options – The first loan deal you get doesn’t need to be the most suitable one for you. There can be other lucrative options in the market. In that case, it is the borrower’s right to explore the market before taking a final decision on borrowing. A pre-approval agreement needs to be accepted in 15 days. These 15 days are like the cooling-off period during which the borrower can explore the other deals.
What factors can get me a pre-approval on a bad credit loan?
If your personal finances have particular circumstances to show, you can get an easy pre-approval without any delay or a lengthy procedure.
- Strong current income status – It is the first concern of any lender when it comes to bad credit loans. Whatever you are, an employed, self-employed or partly-employed, your income should be strong enough to encapsulate the loan instalment.
- Spotless recent financial behaviour – You may have made mistakes in the past by making late payments or missing the payments, but not anymore. If you want a pre-approval on a poor credit loan, you need to improve the recent financial behaviour. Bills, debts all payments should go at the right time.
- Do not make multiple loan applications – The multiple loan applications to varied lenders at the same time can cause various search footprints, which makes you look credit hungry. It should be the first thing to avoid for a borrower because it brings the ultimate threat of rejection.
The varied aspects of pre-approval and its significance on bad credit loan reveal the importance of advance approved funds. You can make a better decision now because poor credit situation cannot bear experiments with financial life.