Warning: Late repayment can cause you serious money problems. For help moneyhelper.org.uk | Representative APR 89.9%
Warning: Late repayment can cause you serious money problems. For help moneyhelper.org.uk

Loan eligibility checker – Are you eligible for a loan?

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Whatever you need a loan for, it’s important you check your eligibility for the loan you’ve chosen before you apply. Making sure you meet a lender’s basic eligibility criteria helps you to understand what kind of customer they are looking for, and can avoid submitting an application that will only be rejected and dent your credit score.

While meeting a lender’s eligibility criteria doesn’t guarantee your application will be approved, it does make this more likely than if you were to apply without doing any research.

The vast majority of lenders will run a credit check on you when you apply for a loan with them. This credit check can use one of two types of searches – a hard search and a soft search, and some lenders may use both. Here we’ve looked into a loan eligibility check, which often uses a soft search to help tell you whether you’re eligible or not, things to consider and the impact of applying for a loan can have on your credit rating.

What is the difference between hard and soft search loans?

The main difference between a hard search and a soft search is that a hard search will be recorded on your credit file, and so affect your credit score. If you apply for a number of loans in a short period of time and each lender records a hard search, this can lower your credit score significantly.

It can also impact your ability to be approved for future credit, as multiple applications in a short space of time can raise a red flag with lenders and cause them to believe you are in urgent need of credit, or are dependent on it. However, soft search loans are becoming more common.

This type of credit check allows a lender to look over your credit history and give you an indication of whether they will or won’t approve your application before you apply. The good thing about a soft search is that it doesn’t show on your credit file, or leave negative markers that can damage your score in the future.

However, it’s worth noting that although soft searches can help you to find out if you’ll be accepted for a loan without having to apply, they still don’t guarantee approval unless the lender says so.

If you choose to go ahead with the official application many lenders will run numerous different checks in addition to credit checks to check you really can afford the credit. Your application could still be rejected based on the outcome of one or a combination of those.

How to perform your own loan eligibility check

Every lender has their own set of eligibility criteria you’ll need to meet. Take a close look at this, and check your situation against their requirements to ensure you match them and if there’s anything you’re unsure of or don’t match then it’s best to avoid applying for a loan with that lender.

For example, to qualify for a short-term loan through Sunny you must:

  • be at least 18 years old
  • be a UK resident
  • not be bankrupt
  • be able to provide a history of your address for the past three years
  • have an income of £500 or more per month
  • provide details of your debit card and bank account
  • have a working mobile phone and email address
  • agree to a full credit and affordability check.

What does it mean if a lender says I’m pre-approved?

If a lender tells you that you’re pre-approved for a loan with them, this means that they have enough information about you. This could be because you’ve borrowed from them before, they’re confident they’ll approve you should you apply.

But, it’s worth noting that every lender is different and in some cases, you may not be granted the loan, as they will still perform their own identity, fraud and credit checks, and could reject your application if the information you’ve provided the lender doesn’t match what they have on file.

What to ask before applying for any loan

Before you submit any applications for credit, it’s important that you’re confident a loan is the right choice for you. Ask yourself these questions first, to ensure you’re prepared to take on such a commitment.

  • Can I find the money I need elsewhere or through an alternative source?
  • Can I afford the loan repayments alongside my existing commitments?
  • How does my credit rating look? Do I need to do anything to improve my rating before I apply?
  • Can I check my eligibility with the lender with a soft search before I apply so that I don’t end up with too many searches on my credit file?
  • Am I confident that the lender I’ve chosen is the best choice for my circumstances? Should I shop around more?

Representative 89% APR

Representative Example: Borrowing: £1000 for 18 months, Total Repayable: £1853.43, Total Interest: £853.43, Interest Rate (Variable): 89.9%. Rates between 9.3% APR and 1721% APR – your no-obligation quote and APR will be based on your personal circumstances. Loan term lengths from 3 to 36 months. Subject to lender’s requirements and approval.

Sunny Loans is a registered trading name of Upward Finance Limited, who is an introducer appointed representative of Flux Funding Limited, who is a credit broker, not a lender. Loan repayment terms are 3-36 month loans.

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

Ready to apply?

If you’re looking for a short-term loan, then Sunny can help. Our partner's market-leading panel of lenders use soft search technology so you can apply if confidence that you are not harming your credit score

Check your eligibility for a loan and apply using the link below.

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Looking for further information on loans and borrowing?

Want to know more about loans and credit? Take a look at our other in-depth guides here: