The advent of ‘FINTECH’ market has unveiled new changes in the lending policies and new financial opportunities for the people across the UK. As the world has entered into 2018, the lending institutions here are in huge pressure to come equal with the growing financial problems of the locals. Now they cannot make excuse of ‘Brexit’ effect and they have to arrange funds for the borrowers even with small loan options.
The financial experts share their views time to time on such issues. According to most of them, the loan companies have a nice opportunity to broaden their business wings with adding more small loans to their kitty. It will help them in fetching attention of more borrowers and they do not have to take risk of giving large funds.
From the borrowers’ perspective, applying small loans would be a boon for them, as they have more chances of guaranteed loans.
Best Time to Look for Guaranteed Approval on Loans
After the Brexit, many financial institutions have done research and poll surveys to get an idea of what prospects do small loan industry have? Many outcomes revealed that the lenders providing small loans have more business opportunities than those with long term loans. It might be the reason why the people with bad credit scores or with no income status see themselves eligible to secure funds. Previously, they did not even think of getting funds because the conventional lending had dominated the marketplace.
The modern day lenders take different observations. They argue that taking risks can actually benefit them in growing their business. But risk is a risk. They might lose their funds if the borrowers cannot make the repayments in time. To minimise such possibility, the lenders make compulsory providing the guarantor because if the primary borrower fails to repay, then the secondary borrower have to pay back the money.
What is driving lenders to give guaranteed approval on loans?
The tendency of the flexible lending terms is visible at the loan market, nowadays. But the question can be raised on what are the reasons that drive lenders to give an assured approval on the loan applications? Such question becomes more relevant when the borrower with bad credit score submits his application. To find answer of this, the financial experts in the UK have pin down two points:
- Repayments are guaranteed from the borrowers’ end
One of the conditions to seek 100% acceptance on loans is to guarantee of the loan repayments in time. It can be done through either guarantor or the security. Banks are too much specific in such scenario as they might ask for both the obligations to be fulfilled. But the direct lenders do not include this among the main loan obligations. They just need one of those obligations to be completed. It means if the borrowers do not have the collateral, they have to arrange the secondary borrowers to ensure the repayments from at least one’s end.
In case of financial emergency, looking out for the responsible guarantor may be impossible or require some time. Since your deposit account is going to be empty of funds, you are desperate to have a quick financial assistance from somewhere. Thus, providing the collateral can also assure the loan providers that their funds are safe and can be received back through that collateral if the repayments are not being on time.
- Borrowers’ income status matters a lot
The flexible nature of the marketplace ensures that the lenders are not too harsh on those individuals, who cannot arrange a guarantor or collateral. But when credit score is also not good, still they agree on guaranteed approval on loans? It is always better to not to make things too much complicated for the lenders. Try to convince them with at least your employment status.
Every lender, whether pursuing the traditional norms or the modern ones, is always happy to fund the employed borrowers. And for the small amounts, they can provide funds despite not secured through collateral or the guarantor.
The bottom line is that income status or guarantor or collateral can make your loan application stronger. It is necessary to ensure your loan company about the scheduled repayments. In fact, such things also help your credit score to improve.
A Descriptive Conclusion
To have a well-balanced financial growth of the country, the gap between the institutions and the people should be at zero level, as much as possible. The loan companies in the UK are focusing on the same by bringing small loans at much flexible terms and conditions. They do not have any issue while allowing guaranteed loans, but of course, with few restrictions.
The FINTECH market has been dominated, but it does not mean that traditional lending values are completely erased from the picture. These are only the amendments such as the online system has taken over the paper format of applying loans. People are now getting funds through online transfer and their documents are also verified online. It is not a revolution, but a much-required change for the financial benefits of the UK citizens.