How can I check if I’m likely to be approved for a loan?
My Community Finance gives you access to credit unions who provide ethical and affordable loans.
You must meet all of the below criteria to be offered a loan with one of the credit union partners we work with:
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Be aged between 21 and 65
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Live in the UK (excluding Northern Ireland, the Channel Islands and the Isle of Man)
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Be employed (not self-employed) and earning at least £18,000 per annum
If you meet these you can go onto use our loan eligibility checker. Our loan eligibility checker lets you know if you’re likely to be approved for the loan of your choice and what interest rate (APR) you will be offered. It uses a soft credit check so has no impact on your credit score.
What do I need to check my eligibility?
To complete the loan eligibility check, you’ll need to provide some basic information so we can review your credit file through a soft credit check.
We’ll ask you:
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How much you would like to borrow, and how long for
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What you’re planning to use the loan for
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Your name, date of birth and current address
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Details about your financial situation, such as income, dependents and how much you contribute towards rent or a mortgage
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Your employment status
Why should I check my eligibility?
When you apply for a loan or any credit, the lender will perform a hard credit check. Hard credit checks leave a record on your credit report, which will be visible to other lenders or organisations with access to your credit report for one year.
Making multiple credit applications within 6-12 months may harm your credit score because it may appear to lenders that you’re in financial difficulty.
Our loan eligibility checker lets you know if you’re likely to be approved for a loan with one of the credit unions we work with before you apply. This can help prevent an unnecessary hard credit check on your report.
Will a loan eligibility check affect my credit score?
Our personal loan eligibility checker only runs a soft credit check, and won’t harm your credit score.
Soft credit checks provide a quick overview of your credit report that are not visible to other lenders - only you can see a record of it on your credit report.
If the eligibility checker suggests you are likely to be approved, and you are happy with the interest rate (APR) offered, you can go on to apply for the loan with one of the credit unions we work with. We will then perform the hard credit check.
What could make me be turned down for a loan?
To be eligible for a loan from one of the credit unions we work with, you must meet a specific criteria: being between 21 and 65 years old, residing in the UK, and employed with an annual income of at least £18,000. Apart from not meeting these eligibility requirements, other common reasons for being turned down are:
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Your credit score is too low
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You are not seen to be able to comfortably afford repayments
The credit unions we work with offer loans to those with a “fair” credit score or better. So if you have a bad credit score, you will likely not be able to take out a loan with them.
All responsible lenders will have affordability requirements to ensure you can comfortably repay your loan. If your outgoings are seen to be too high compared to your income when future loan repayments are added in, you’ll be turned down.
How can I increase the likelihood of being accepted?
Knowing why you may not qualify for a loan can help you understand what you need to do to get one in future. The three most likely reasons are because you don’t meet the minimum criteria published by the lender, you are seen as not being able to comfortably afford the repayments alongside your other spending or because you have a low credit score.
Always make sure you check if the lender lists a minimum income requirement or other restrictions. For example, the credit unions we work with only accept people aged between 21-65, who live in the UK and earn at least £18,000 (not from being self-employed including the director of a company). Take steps to ensure you meet all of these requirements before applying.
Lenders have to carry out strict checks to see if you can afford to pay back the loan. This will usually involve adding a buffer to their calculations of your income/outgoings and making an assumption about how your outgoings will change in the future e.g. with inflation.
You can use free websites and apps like Credit Karma, Experian, and ClearScore to check your credit score. If you discover you’ve got a bad credit score, there are a number of things you can do to improve it:
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Make sure you’re on the electoral roll - this helps to prove your fixed address
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Ensure all the information on your credit report is accurate and up to date - if you spot any inaccuracies, contact the credit reference agency as soon as possible to correct them
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Aim to keep your credit utilisation below 25%. This is the amount of money you have actually borrowed divided by the total amount you are eligible to borrow e.g. credit card limit.
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Pay any bills or credit repayments on time and in full - missing payments or failing to pay back what you owe (defaulting) can damage your credit score significantly and has a lasting negative impact
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Don’t make multiple credit applications within a short period of time - lenders may assume you’re having financial difficulties.
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Don’t use a credit card to withdraw cash - this can appear to lenders that you’re in financial trouble