How to Increase Your Chances of Getting Loan Approval

Each loan application is unique, and there are no universal rules that can help you win an approval every time. Applicants have different circumstances—they have varying credit scores and incomes, so what gets one person approved might not work for another.

What’s more, some lenders look at free cash flow, education level, and other secondary indicators of financial stability, and these could also determine whether you get the loan or not. Whatever their criteria are, all loan companies have one thing in common: they want on-time payments. Here are tips that will help you increase your chances for loan approval.

Get a Better Credit Score

One of the most significant factors in personal loan applications is your credit score. The higher it is, the more likely you’ll get loan approval. If you think your credit score should be higher than it is, you could check your reports for errors. Closed accounts reported as open, incorrect credit limits, and wrong accounts could be hurting your score. Get a free annual credit report and dispute errors you find.

Another thing you should do is become proactive about making monthly payments. Get on top of your debts and try to pay more than the minimum whenever possible. It will help your credit utilization ratio and improve your payment history—these two things make up 65 percent of your FICO score.

You could also request an increase in your credit limit. If your income has risen since the time you got your credit card, and don’t miss your monthly payments, you can call the customer service helpline of your bank and ask for an increase. Note that this strategy could hurt your credit score. If you’re planning to use it, better ask a financial planner specializing in personal loans beforehand.

Balance Your Income and Debts

Besides improving your credit score, you can also supplement your income. Consider starting a side hustle or see if you can get a raise at your full-time job. While doing this, don’t neglect to pay down debts.

If you have liquid assets like stocks in taxable accounts, you could sell these and use the proceeds to pay for high-interest debts. When you boost your income and lower your debt, you improve your DTI or debt-to-income ratio. Many lenders look at your DTI to determine if you can take on more debt.

Don’t Request More than You Need

Lenders consider it risky when you request more money than you need to reach your goals. Before approving an application, they carefully consider the reason you’re asking for a personal loan. If the amount you’re asking seems larger than the reason you state, they might hesitate to approve it. Besides being risky, larger personal loans affect your ability to meet other financial obligations like mortgage payments or student loans.

See if You Can Get a Co-Signer

Applicants whose credit scores are in the “Fair” range will probably get approval if they have a co-signer with a stronger credit score. The co-signer is equally responsible for payments, so if lenders think they can afford the risk, they’ll be likely to approve the loan.

You cannot predict job loss, disabilities, and other events that affect your ability to make payments. If anything like this happens, your co-signer will have to make payments for you. If you’re taking a co-signer, make sure they understand the risks.


The best way to get a loan approval is to meet a lender’s minimum qualifications. Besides finding a loan option that fits into your budget, increasing your income, or boosting your credit score, you can also try getting a co-signer or a pre-qualification for a loan. When you can prove that you are ready to take this responsibility, lenders won’t see loaning to you as a liability.

At First Finance, we put our clients’ stability first. We offer ,personal loans in Madison County, TN—our fast application process and affordable payment plans make it easy for our clients to reach their financial goals. Contact us today for more information!