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There are many benefits to applying through a credit broker. One of the main advantages is that you could have a better chance of being approved for a loan. This is because your application will be considered by a panel of trusted short-term lenders, rather than just one short term lender.
CashLady takes a closer look at the application process of applying for a small loan through a broker.
How to apply for a small loan: Find a reputable broker
A good credit broker should not charge you fees for their services. At CashLady, we earn our money from fees the lenders pay us when loans are successfully funded.
All brokers and lenders must be approved by the Financial Conduct Authority (FCA). Check that the broker you are thinking of using is on the Financial Services Register.
FCA-authorised brokers should only deal with reputable lenders who are also regulated by the FCA. If you send your application to a reputable broker (you could check credit brokers on review websites such as TrustPilot), you can be sure that you will not be applying for a loan with an unregulated credit provider.
Ensure that any broker you choose only works with lenders who do not charge any application fees.
Check that you are eligible for a small loan
Different lenders have different lending criteria. In essence, this means that some loan providers may be willing to lend you money when others would not.
However, there are a few criteria that you will have to meet to apply for any small loan.
You must be at least 18 years old and be a UK resident. You should also have a UK bank account and be employed, with a regular income.
Going through a broker gives you the opportunity to apply for a loan with a variety of lenders at the same time.
Other benefits of going through a credit broker may also include less time completing multiple forms and fewer footprints on your credit file, which may impact future borrowing.
How to complete a small loan application form
If you are happy that you have found a reputable credit broker and sure that you want to go ahead with your small loan application, now is the time to complete the online application form.
Before you complete your small loan application form, it can be quicker if you have a few things to hand.
As well as your personal details such as your name, address and telephone number, you might need to submit various other pieces of information related to your financial position.
You will normally be required to detail your employer’s name, your pay date and your monthly income. You could also need to divulge your monthly expenditure, including your mortgage or rental costs and food bills.
This information is required so that lenders can ensure that you can afford to repay your loan and any sum borrowed is comfortably within your means.
You may also need to provide your bank details, including your sort code and account number so that your loan can be paid into your account and the scheduled repayments can be taken.
Try to ensure that you have all of this information next to you when you are on the computer or mobile device. If you do, it should only take you 5 minutes or so to submit your small loan application.
What happens when my small loan application is submitted?
After you have submitted your credit application, it should then be sent to a trusted panel of lenders to see if they can approve your application.
You may be offered a loan that is a different amount to what you initially applied for. This could be due to your credit rating and the affordability of the loan.
Before your application can be approved, you may be asked to submit additional information or further checks may need to be carried out.
If your application is accepted by one of our short-term lenders, you should then be sent your loan agreement.
At this point, it is important that you read and understand the terms and conditions of your loan and ensure that you are happy to proceed.
You will now deal directly with the lender
If you decide to go ahead with your small loan, your remaining communication will be directly with your lender.
Small loans: summary
Using a professional loan broker may save time typically spent researching and applying to lenders who may never approve your small loan application. Also, by going through a broker, you may be offered a better deal by a loan provider who you would not have found otherwise.
By using a credit broker you could:
- apply for a small loan with a range of different lenders by only filling out one application form
- save time by not having to research lots of different short term loan providers
Additionally, if you apply for a small loan through a broker, it may result in less ‘footprints’ on your credit file.
However, if you want a loan from a specific short term lender, you may not be offered a small loan by that particular lender.