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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. This helps you understand if you can get a loan, as well as helping you compare loan amounts, repayment periods and interest rates. 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 applying for a loan can have on your credit rating.
What is a loan eligibility checker?
Also called a loan approval checker or a loan calculator, these are the initial stages of applying for a loan. With a form to fill out, it gives you an instant decision on whether you are likely to be approved for a loan based on your information, your credit score and the lending criteria of a panel of lenders.
Related: What Is A Credit Score?
Using a loan checker only takes a couple of minutes, and it’s easy to use. Also known as a soft search, these don’t harm your credit score, and you can see your loan eligibility instantly afterwards. Not only to see if you’ll be approved but you can also use it to compare loan amounts, repayment periods and interest rates, so it’s a good tool to use. If you’re happy with your choice and are eligible, you can then apply for the loan.
Why should I use an eligibility checker?
If you apply directly for any type of loan or credit, the application can leave a record on your credit report, and if you’re rejected, it can actually damage your score. This is because the vast majority of lenders run a credit check on you when you apply, either a soft or a hard search.
Using a loan checker is known as doing a soft search on your information in order to tell you how likely you are to be approved for a loan. Doing this doesn’t make a dent on your credit score and you can see if you’ll be approved before actually applying and agreeing to take out a loan, making it better for you in the long run.
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 will 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, and is used on loan eligibility checkers.
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 loan checker 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 using a loan eligibility checker is a soft search and can help you find out if you’ll be approved, they don’t guarantee approval unless the lender says so. If you choose to go ahead with the official loan application, that’s where more checks are made to make sure you’re a responsible lender.
What information do I need to know when using a loan checker?
When filling out a loan eligibility checker there are a few things that you’ll need to know and provide, these are:
- How much you wish to borrow
- The length of time you wish to repay your loan
- How you will use your loan
- Your name
- Contact details
- Date of birth
- Address
- Employment status
- Monthly income
- Monthly expenditure
This information alone in a soft search, as well as your credit score, can give an idea of how likely you will be accepted for a loan. Having a good credit score will improve your chances of getting approved, however you still can be accepted with a lower score.
Loan checkers can also be a great way to compare loans as you can change the amount and repayment period to compare interest rates and if you’re more likely to be accepted for a different loan amount.
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 to ask before applying for any loan
Before you use an eligibility checker or 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?
Loan eligibility checker FAQs
To help you understand the process of using loan checkers, we’ve answered the most common asked questions around this tool.
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Our loan eligibility checker is the first step to applying for a loan, first you just need to answer a few questions and give details on what loan you need and personal details. This is then sent to to our partners panel of lenders which give a soft credit check and an instant decision on whether you’ll be approved. If you are approved and pass the loan eligibility check, you can choose to go ahead with the loan or not. If you do, lenders will then look at your credit report and do numerous checks in full to either approve or deny you.
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No, our loan checker can show you if you’ll be approved for that loan amount without harming your credit score as lenders do soft credit checks. This means that while checking if you’re eligible to be approved for a loan you can see your records but lenders will not. If you decide to complete your application to take out a loan, that’s when lenders will conduct a hard credit check which might affect your score.
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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.
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If you are rejected or stated that you won’t be approved for a loan in our eligibility checker, there might be a few reasons why you can’t get a loan. Sometimes, you can see if there’s a reason you’ve been turned down, but a good starting place is to look at your credit score. If you have a poor credit score, you still may be eligible for a loan, but if that’s the reason you’ve been rejected, you can work on improving your score.
The most common reasons why you might be turned down are:
- Insufficient income or too many outgoings
- A low credit score
- Too many credit applications in a short period
- Limited or no credit history
- You don’t meet the loan eligibility criteria of the provider
- Incorrect personal details to what’s on file
If our loan eligibility checker shows that you won’t be approved for a loan, the last thing you should do is go ahead with your application. As if you do and are rejected, it can damage your credit score.
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If you’ve been turned down, there are a number of ways to improve your ability to get a loan; these include:
- Register on the electoral roll
- Pay your bills on time
- Reduce any outstanding debts
- Close any unused credit or store cards
- Limit credit or loan applications
- Check your credit history and monitor it
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Yes, you can; if you have bad credit, you can use our eligibility checker, and it can show you how likely you are to be approved for a loan. Bad credit loan eligibility checkers give great insights, don’t harm your credit score further, and the lender panel access more information than just your credit report, so while your score is essential, it’s not the sole reason you could be accepted or denied. Just note that while you still can be eligible for a loan with bad credit, your choices may be limited on how much you can borrow, for how long, and you’ll likely have higher interest rates. For more information, check out our guide on What Is Bad Credit.
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At Sunny, we offer access to loans from as little as £100 to £2,500 and larger amounts, and you can borrow from 3 to 36 months. With our loan checker, you can select and compare loans and even use it as a loan calculator to gauge what you can borrow over what time period, as well as how that impacts interest rates. This also helps you know what amount you will be more likely to be accepted for.
Check your loan eligibility online
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 with confidence that you are not harming your credit score.
You can check your eligibility with our loan checker online today, with instant decisions on whether you’ll be approved. Compare loans, find the best one for you, and if you’re happy, you can choose to complete the process and apply for that loan.
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:
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Speedy payment
Small loans can be sent today.
No obligation quote
Instant quote with a soft search and no fees.
1000's of people helped
Over 7500+ no-obligation quotes processed daily!