Are you preparing to apply for a loan with poor credit scores? The loan application process demands producing some documents. Thus, you are curious to know the ones you have to arrange for borrowing funds.
Poor credit is always projected as a setback. It is true that this factor should not be taken lightly. However, this is not going to be the only reason behind your struggle to get a loan.
You do not have to worry a lot about getting rejected because of poor credit now. This is because loans for bad credit in Ireland are within your reach now. These loans are curated to minimise the financial trauma happening in your life.
Above all, your credit scores will not be validated upfront. Thus, you do not have to produce any document concerning your credit history. This is applicable when you are pre-qualifying for loans.
However, credit verification will be vital for the final processing of your loan application. The biggest advantage of pre-approval is to allow you to check the rates and terms you can get. Multiple lenders have provided this facility at the same time without leaving any footprint on your credit profile.
Now, it is important for you to confirm the documents you should produce while applying for a bad credit loan. This blog is going to help you in this endeavour.
Necessary documents to apply for a bad credit loan
Direct lenders have made borrowing convenient for poor credit borrowers. It does not mean that they will not verify your background. There are standard lending conditions which should be fulfilled so that you can qualify to apply for loans.
Likewise, some documents will be quintessential requirements for direct lenders. You must take note of them.
Proof of identity
You must provide a relevant document establishing your identification. This is a mandatory requirement, and you cannot overlook it at any cost. If you fail to produce the necessary proof, the lender will straightaway reject your application.
Then, it will not matter whether you have bad or good credit. The documents you can provide are driver's licence, passport, etc. It should be enough to prove your identity.
Proof of Address
It is needed to show where you have been putting up. This could be a temporary or permanent address. This should be the current address you are living in.
It should be valid so that if the lender sends anything to your address, you can receive it. You can share some bills, bank statements, etc., to establish you are currently living.
Residency proof
You must prove that you have residency in Ireland. These loans are obtainable by someone who is a permanent resident. Thus, if you are here for the time being, maybe these loans are not going to be a perfect opportunity for you.
Income proof
The lender would need to verify that you are earning money. Now, with direct lenders, you have the flexibility of being able to earn via any avenue. There is no need for you to earn from direct employment, i.e., from a job only.
You must be earning enough money to enable you to repay loans without any exertion. The documents you can hand over could be pay slips, tax returns, bank statements, etc. It should be adequate to convince the lender about your earning capability.
Status of debts
Some of the lenders might be eager to understand whether or not you can afford loan payments. One of the ways to establish this is by acknowledging the extent of debts you have been managing right now. In order to understand your equation with pending payments, they might ask you to share the debt-to-income ratio.
This will show if you have more debts than earnings or vice versa. You must not hide if payments of some loans are still ongoing. Besides, you must let the lender know that you are handling credit card dues.
Details regarding your employment
Here, you need to share details showing where you are working. This includes the address of the employer with phone numbers, etc., as their contact details. The lender will be keen on finding the status of your employment.
For this purpose, they will require the contact information of your employer. Lack of co-operation from your end might lead to the lender rejecting your loan application.
Bank statements for a few months
You must have noticed how this document is needed to establish a variety of aspects from your financial profile. The lender will have other reasons to enquire about these documents. It is necessary for them to go through your financial history ahead of making any decision regarding loan processing.
At the same time, clarity about your spending habits is vital for them to understand. Using this information, they can know if you spend a lot of money on random purposes or if you spend money carefully. The likelihood of successful loan payments depends a lot on this aspect.
Personal references
Some lenders might need strong validation from family or friends about your financial commitment. They might be the personal guarantee a lender would seek ahead of making any decision regarding loan approval.
When you have poor credit, you might have to produce a guarantor as demanded by some lenders. In that case, you will have to share the income proof and credit reports of the guarantor. The lender requires them to make sure about the financial background of the person who has agreed to become your guarantor.
Documents supporting collateral
Some loan providers might need your assets, which will act as security against the loan amount. These lenders ask for collateral to make sure about loan repayment. You have bad credit, which lowers the chances of managing funds for repayment.
In this situation, your assets can act as assurance for repayment. This will help you get a positive response from the lender.
The bottom line
You must be alert about the purpose for which you will borrow money. Although you are not accountable for explaining the purpose, you must be confident about your decision. Make sure that you are getting loans for a legitimate purpose.
