Loan Eligibility Checker

What is a loan eligibility checker?

A loan eligibility checker allows you to see your chances of getting a loan, with no impact on your credit history.

It means you can see which loan (or loans) you’re likely to be accepted for, as well as the interest rate you could be charged, before formally applying.

Because it indicates which lenders (if any) may approve your loan application, a loan eligibility checker can remove some of the stress and guess work from the application process.

To check your eligibility, you simply need to provide some details about you and your finances. The provider will also typically run a soft credit check, but this won’t affect your credit score or be visible to any providers that check your credit file.

Why should you check your loan eligibility?

If you’re considering a personal loan, there are many reasons why it’s worth checking your eligibility before applying.

Firstly, by showing how likely you are to be accepted for a particular loan, a loan eligibility checker can minimise the chances of applying for an unsuitable loan and having your application rejected.

This can help to reduce the number of loan applications you need to make and so limit the number of hard checks on your credit file.

Too many hard credit checks in a short period of time can affect your credit score and is likely to be viewed negatively by lenders, so it’s important to only apply for a loan if you’re confident of approval.

When you use an eligibility checker, you can often also see the interest rates you may qualify for. You may not necessarily receive the representative APR advertised by the lender, so getting a better idea of the rates you could be charged can help you to decide whether a loan is the right option for you.

It’s also worth noting that checking your eligibility for a loan doesn’t mean you have to apply for one. If you find you’re not eligible for a loan (or even if you are eligible), you could choose to postpone your plans.

This could give you time to improve your credit score, for example, before checking your eligibility again at a later date to see if you qualify for more competitive rates.

What determines loan eligibility?

A range of factors affect your eligibility for a loan but, crucially, a lender will only approve your application if it’s confident that you will repay the loan in full and on-time.

Some key elements that lenders will take into consideration when determining your loan eligibility include:

• your income
• your expenditure, such as your rent or mortgage payments
• your employment status and how long you’ve been in your current job
• the amount of debt you already have, including loans, credit cards and overdrafts, for example.

Your credit score will also determine your loan eligibility. Lenders will check your credit history to see your record of making repayments, your credit utilisation ratio (how much of your available credit you’re currently using) and any recent applications for credit, among other details.

Providers will assess all this information to determine how much of a risk you present, and then decide whether or not to offer you a loan.

Information to provide

When you check your eligibility for a loan, you’ll need to provide some personal details alongside some financial information, including:

• your name and address
• your date of birth
• your contact details
• whether you rent, own your home or live with parents, for example
• your employment status
• your monthly income
• how much you spend on rent or mortgage payments each month
• whether you have any financial dependents

You will also need to tell the provider how much you want to borrow, the term you want to borrow over, and what you plan to use the loan for.