Documents you need when applying for a loan

By: admin

In the old days of applying for a loan you had to visit the local bank and sit with the manager who would go through form after form with you sometimes taking hours to complete.

After the long hours of form filling were complete you would then have to wait a few days to see if your loan was approved or weeks in the case of mortgages.

Nowadays things have changed drastically from how things used to be. Now all lenders and all banks will have access to your credit score which they can access on-line.

All loan applications are now generally processed on-line making the whole process much faster and easier. So easy that you can apply for a loan from the comfort of your own home, on your P.C, tablet or smart phone.

Depending on what sort of loan you are applying for will determine the speed that the loan is approved. Payday loans and short-term loans can be approved in principle in a matter of minutes and you could have the money in your account within an hour.

Now despite lenders having access to a wealth of information regarding your credit history at the touch of a button they may well sometimes need some additional information from you or some additional documents to confirm various details. This is not uncommon specially if you are requesting to borrow a larger sum of money from the bank or lender.

The lender is performing their due diligence to ensure that you are able to afford the repayments on the loan and that the loan repayments will not cause any financial stress for you.

If your credit score is not the best, if you have poor credit rating and are looking for a payday loan, you might consider a guarantor loan. If you do go for a guarantor loan the lender will ask to see your guarantors’ finances as well.

Details which you will be expected to provide on a loan application will be at least the following:

  1. Full name
  2. Date of Birth
  3. Full current address
  4. How long you have been at the current address
  5. Contact information:
    1. Phone number
    1. Mobile contact number
    1. E-mail address
    1. Work contact number
  6. Type of work you do
  7. How many hours you work per week
  8. How much you earn
  9. How frequently you are paid
  10. You monthly outgoings bills, memberships etc.

Lenders need at the very least all of the information above to be able to make the right choice as to whether they ought to lend to you.

The lender will also determine as to whether to lend to you based on the amount of money you wish to borrow along with the duration.

For example, if you decide you want to borrow £100 over a year, they may turn it down since there is little profit for them to have £100 out there for so long.

They would rather lend that £100 to someone who will pay it back with interest within the next 30 days. Recall from previous articles that The Financial Conduct Authority has place caps on the rate of interest and fees, along with a ceiling on the maximum that a borrower will pay back which stands as twice the principle amount.

So, if you borrow £100, you’ll never have to payback more than £200 over the life of the loan.

If you make any mistakes on the application form the loan will most probably be refused. From our records most loans which are applied through Cashute are rejected due to errors in the application forms, such as missing or incorrect house numbers, misspelt street names or even misspelt names. Simple mistakes but ultimately frustrating for you. therefore, it is important that you double check the details you enter into the application form.

For larger loan amounts the lender will most probably come back to you for more details. Once again this is also for your benefit as well as the lender. You may have been a little optimistic regarding your own ability to repay the loan and the lender wants to contact you for clarification.

The sort of documents that the lender could come back to request from you are:

  1. Wage slips for the last 6 to 12 months. (Get into the habit of keeping them on file)
  2. Letters showing the following:
    1. Tax credits
    1. Benefits
    1. Alternative income
  3. Bank statements. This is generally so that the lender can verify your identity
  4. Photocopy of your passport
  5. Photocopy of your birth Certificate
  6. Photocopy of your driver’s license.
  7. Utility bill potentially

The additional documents are generally the sort which you would have to hand in any event. It is always good practice to keep a file system with all your documents in one place and makes sure everything is updated as new bills come in.

The quicker you can access your documentation the quicker you will be approved for your loan.

Many people in the U.K struggle with debts and many do not know how to start to repay them speaking to a debt advisor is one of the best things you will do along with taking action yourself by speaking directly with your creditors.

https://www.nationaldebtline.org/ and https://www.moneyadviceservice.org.uk

You should always seek professional advice when handling debt problems. Cashute are not licensed debt advisers and any information contained in this article should not be taken as legal advice. It is your Responsibility to seek out correct legal advice

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Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk