How to boost your chances of getting a personal loan

Whether you’re covering an unexpected expense, planning a big purchase or consolidating debt, getting approved (and at a good rate) can make a big difference to your finances.

But before a lender says yes, they’ll take a close look at a few key things – including your income, employment status and credit history – to work out how risky it is to lend to you.

There are plenty of steps you can take to give yourself the best shot at approval. In this guide, we’ll walk you through what lenders really want to see, how to get your finances in shape, and where your credit score fits into it all.

What do lenders look for when you apply?

Ever wondered what goes on behind the scenes when you apply for a personal loan? Lenders aren’t just picking numbers out of a hat – they look at a few key things to work out whether they’ll lend to you, how much, and at what rate.

Here’s what usually matters:

Your income: Lenders want to know you’ve got enough coming in each month to comfortably afford the loan repayments. A regular, steady income helps show you’re a safe bet. It’s not just about how much you earn – it’s also about how reliable that income is.

Your job situation: Being in full-time, permanent work tends to tick the right boxes. It gives lenders confidence that your income won’t suddenly disappear. That said, being self-employed or in part-time work isn’t necessarily an issue – but it might mean getting asked for more proof of income.

Other income: Unemployed? Some specialist lenders accept benefits as a form of income in place of a salary, such as Universal Credit, Personal Independence Payment (PIP), Child Benefit and more.

Your credit score: This tells lenders how you’ve handled borrowing in the past. If your score’s not looking its best, you might still be able to borrow, but your options could be more limited.

All these things help lenders decide if you’re a low-risk borrower. The lower the risk, the more likely they are to offer you the loan (and at a competitive rate, too).

How can I increase my chances of getting a personal loan?

Want to give yourself the best shot at being approved – and getting a decent interest rate? It all comes down to looking good to lenders. They want to see that you’re financially stable, trustworthy and able to repay what you borrow without too much trouble.

Here’s what can help boost your chances:

• Check your credit score: Before you do anything else, it’s worth checking your score with one of the major credit reference agencies. Lenders will definitely be looking at it, and the better your score, the more likely you are to be offered a loan – and at a competitive rate, too.

• Register on the electoral roll: Lenders use the electoral roll to confirm your identity and address. If you’re not on it, it could raise a red flag and slow things down.

• Pay down existing debts: Got other loans, credit cards or buy-now-pay-later balances hanging over you? Paying some of that off could make a big difference. The less you owe elsewhere, the more affordable you’ll look to lenders.

• Keep your income steady: If your earnings are regular and reliable, that’s a big tick in the eyes of most lenders. A stable income makes it easier to show that you can comfortably manage monthly repayments.

• Avoid too many applications at once: Each loan application leaves a mark on your credit file. Too many in a short space of time can make it seem like you’re desperate for cash – not a good look. Try to space out applications and only apply when you’re fairly confident you’ll be accepted.

• Use eligibility checkers: Most lenders now offer a “soft search” tool to check if you’re likely to be approved. It doesn’t affect your credit score, and it’s a great way to get a clearer picture of your chances before making a full application.

Credit scores - here’s why yours matters

Your credit score plays a big part in your chances of getting a personal loan. It’s a three-digit number based on your credit history – basically, how you’ve handled borrowing in the past. Things like missed payments, high credit card balances or a lack of borrowing history can all impact your score.

A higher score usually means you’re seen as less of a risk, so lenders are more likely to approve your application – and offer you a better interest rate too. On the flip side, a lower score doesn’t mean you’ll be turned down automatically, but you might have fewer loan options or face higher rates.

Your credit score isn’t set in stone either. It changes over time as you manage your money. Paying bills on time, lowering your credit card balances, and avoiding too many credit applications in a short space of time can all help give it a healthy boost. It’s also worth checking your credit report for errors. Sometimes old accounts or incorrect details can drag your score down unfairly.

There’s no “one” credit score keeper, by the way. Each lender uses their own criteria, and there are three main credit reference agencies in the UK – Experian, Equifax and TransUnion – each with slightly different scoring systems. So your score might vary slightly depending on where you check. But they’re all based on similar information, so any improvements you make should have a positive effect across the board.

Ready to dig deeper? Read our guide to how hard and soft credit searches work.