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Can Anyone Borrow an Online Loan?

In an emergency, you don’t want to waste time with a cash advance that you have no hope of qualifying for if it delays how quickly you can receive your funds. When you’re looking for a loan online, your priority is locking down an option that you’ll get – no ifs, and, or buts.

With this aim, you can easily find online direct lenders that guarantee approval with a same-day cash advance. But do you qualify for these loans? Or better yet, should you believe their claims?

Today, let’s uncover the truth about online loans. Below you’ll find the main factors that may determine your eligibility for a loan.

1. Credit Score

Credit scores have massive sway over whether you can be approved for an online installment loan or line of credit. If it’s above prime, you’ll find it easy to be approved for nearly anything at affordable rates.

People with subprime credit won’t have as many options.

Below, you’ll find the states with the lowest average scores in the country:

  •   Mississippi: 675
  •   Louisiana: 684
  •   Alabama: 686
  •   Texas: 688
  •   Georgia: 689

If you live in Texas with an even lower score, you might fall for the trap of no credit check loans or guaranteed approval for a same-day cash advance. These lenders won’t check your credit, so anyone can apply.

So, what’s the catch? These lenders won’t check your credit as an excuse to charge you rates and other fees to make these options very expensive.

Luckily, some online direct lenders offer installment loans for bad credit. They’ll still run a background check on your finances, but a subprime score may not take you out of the running.

2. Location

Location is a tricky factor when you’re looking for loans online. It doesn’t matter where you live or where your lender is located, you can visit their website as long as you have access to the Internet.

But visiting and applying are two separate things. You can only successfully borrow money from a lender that’s accredited to offer loans in your state.  

Suppose you live in Texas, and you’re looking for the best rates on installment loans Texas has to offer. Be careful when comparing your options. You’ll want to look at your lender’s location and whether they have the appropriate license to provide or service installment loans in Texas before you apply.

3. Age

Whether you’re looking for Texas installment loans or a line of credit halfway across the world, most lenders have an age limit for their customers. They set it according to your government’s age of majority, which is usually around 18.

If you’re younger than this, you’ll probably struggle to find a loan online by yourself. You’ll have better luck with a co-signer or becoming an authorized user on a guardian’s credit card.

4. Income

How much you earn is another eligibility requirement. It joins your credit score as a way to assess how easily you could afford to repay a loan on time.

Some lenders only ask to see proof of employment, income, and payment schedule to make this decision. Others may also check your income-to-debt ratio, which considers how much of your paycheck is tied up with existing debt. If you surpass their threshold for a healthy ratio, you may be denied because you don’t have enough expendable income to cover a new loan online.

Now that you know what impacts your eligibility, keep an eye out for what you need to apply. You’ll increase your chances of being approved by sticking to loans that match your profile. 

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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