What is a loan eligibility checker?
An eligibility check can help you get it right first time when you come to make your loan application.
Our loan eligibility checker gives you an indication of what loans you’re likely to be accepted for. The results are based on information from your credit report and the loan provider’s lending criteria.
Why should I use a loan eligibility checker?
It can be difficult to know which loans (if any) you’ll be accepted for. Every time you apply for credit, it leaves a mark on your credit file that lenders can see.
Lenders look at your credit file to see how you’ve managed credit and made payments, including whether you’ve applied for credit recently and if you’ve missed payments or made any late payments. Your credit history is captured in a single number called a credit score. Having a good credit score increases your chances of getting approved for a loan.
That’s where we can help. You can check your loan eligibility online with our free checker to see how likely it is that you’ll qualify for a loan, before you apply. This means you won’t waste time chasing loans that may be out of your reach. And you’ll protect your credit score while you’re shopping around.
Should I speak to my lender first?
Yes. If you want to make a partial overpayment, then a 28-day notice period applies. You’ll be charged interest on the full amount you owe for 28 days after you notify your lender of an extra payment.
If you want to pay your loan off in full, you’ll need to ask your lender for an ‘early settlement amount’, which is a recalculation of what you owe based on:
- what you’ve already paid and the amount you still owe
- what interest charges apply
- whether there are any early payment fees.
Your lender’s obliged to give you this figure if you ask for it and to give you at least 28 days to think it over. If you decide to go ahead, you’ll need to pay the outstanding early settlement amount by the settlement date the lender has given you – otherwise it will need to be recalculated.
If you don’t ask the lender for the figure, you may end up paying the wrong amount.
You don’t have to pay off the loan if you decide you’d be better off continuing with your monthly instalments.
How do lenders decide if I’m eligible for a loan?
Lenders want to be as sure as possible that you’ll be able to pay back the money they lend you and that you can comfortably afford your monthly repayments.
Affordability criteria for each lender can vary, but usually they’ll look at:
- Your income and job status. A regular income and full-time employment can show lenders that you’re financially stable, which makes them more likely to lend you money.
- Your credit history. Lenders will look at your credit file to see whether you’ve applied for credit recently and whether you’ve missed any payments. A solid track record of repaying debt after borrowing money shows you can be trusted to take out a loan. When they do a credit check, lenders will also look at your credit rating – the higher your score, the more chance you have of getting the loan amount you want at a decent interest rate.
Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged over 18 or over. Credit is subject to status and eligibility.
What do I need to use the loan eligibility checker?
To use the eligibility checker, you’ll need to answer a few questions about:
- How much you want to borrow
- Your personal details, including employment status and occupation
- Your UK address history
- Your annual salary and any other income
- Any financial dependents
- Any mortgage or rent payments
This online eligibility check won’t impact your credit score. Once we have the details we need, we’ll let you know whether you could be accepted for a loan before you apply.
Why use Compare the Market?
See loans you’re eligible for from a wide range of providers
Our loan eligibility checker is provided by Runpath Regulated Services Limited, authorised and regulated by the Financial Conduct Authority
We compare a wide range of loan providers, including banks, supermarkets and department stores, to help you find a lender that’s right for you.
Popular loan providers you can compare through us include:
- Virgin Money
- Nationwide Building Society
- M&S Bank
- Sainsbury’s Bank
Correct as of May 2021.
Money product expert
What our expert says
“You can check your credit report for free online through three credit reference agencies: Experian, Equifax and TransUnion. Even minor errors on your file can cause difficulties getting a loan, so it’s important to get your credit report in tip-top shape. Checking your report won’t damage your credit score.”
Frequently asked questions
Will using the loan eligibility checker impact my credit score?
No, don’t worry. The eligibility checker is based on a soft credit search and isn’t connected to a real loan application. You can use the checker as many times as you like without it affecting your credit score. You’ll be able to see the eligibility check on your credit file, but the lender won’t.
If you decide to apply for a loan, the provider will carry out a hard search. Each hard search stays on your credit file for 12 months.
How does the loan eligibility checker work?
You give us a few details about yourself, including your name, address and employment details, and we use this information to retrieve your credit file. We’ll compare your credit file to the lenders’ criteria for accepting loan applications, to work out how likely you are to be approved for each loan.
How will my information be used?
How can I improve my credit score?
There are several ways you can improve your credit score and so increase your chances of being accepted for a loan. Here’s a few simple ways to boost your credit rating:
- Register to vote. Lenders use the electoral roll to verify your identity and where you live, so make sure you’re registered to vote at your current address.
- Make payments on time. Paying off your credit card in full each month and continuing to pay your bills on time show you’re willing and able to repay debts. If necessary, take a few months to reduce your current debts and improve your overall credit rating.
- Keep your debt levels low. Try to pay off outstanding debt before you apply for a new loan – lenders might be reluctant to lend you more if you already have a lot of debt.
- Check your credit file for mistakes and fraud. If you spot anything, you can get it fixed. You can check your credit report online for free at Experian, Equifax and TransUnion.
What are the minimum requirements for applying for a loan?
To apply for a loan, you need to meet certain requirements. These can vary from lender to lender, but typically you need to tick the following boxes:
- You must be 18 years old or over. For some loans, you might need to be 21 to apply. Some lenders also have upper age limits.
- You need to be a UK resident with full rights to live in the UK and have at least three years’ worth of UK address history.
- You need to have a current account.
- You must not have been declared bankrupt in the past six years.
How long does the loan eligibility checker take?
The loan eligibility checker is quick and easy to use. It takes less than two minutes*** to get a list of suitable loans to compare.
***On average it can take less than two minutes to complete a loan comparison through Compare the Market based on data in November 2020.
What are hard and soft credit searches?
Credit searches reveal information about your financial behaviour and history found on your credit file. There are two types of credit search:
Hard credit search
A hard credit search is a thorough search of your credit report. Lenders will carry out a hard credit search every time you apply for credit: for example, when you apply for a loan, credit card or mortgage.
A hard credit search will be marked on your credit file and lenders will be able to see that you’ve applied for credit.
Too many hard credit searches over a short period of time can harm your credit score and affect your chances of getting a credit application approved. It gives lenders the impression that you’re struggling with your finances and have possible debt problems.
Most hard credit searches stay on your file for 12 months, so it’s a good idea to make as few credit applications as possible and space them out to help protect your credit score. For example, if you apply for a new credit card, wait a few months before applying for a loan.
Soft credit search
A soft credit search is a basic look at your finances. It’s not as in-depth as a hard search. A soft search can be used as an initial check to see how likely you are to be approved for a loan or other types of credit.
You can do your own soft search if you want to check your credit file. Soft searches aren’t visible to lenders, so they won’t affect your credit score in any way. You can carry out a soft search as many times as you like, as only you will see them on your credit file.
You can check your credit file for free with one of the three credit agencies: Equifax, Experian and TransUnion.
When you use our loan eligibility checker, we’ll carry out a soft search. This will give you an idea of which loans you’re likely to be approved for without it harming your credit score.
How will the loan eligibility checker show up on my credit report?
The soft search used by our loan eligibility checker will appear in a separate section of your credit file under ‘other searches’. Lenders won’t be able to see this, only you. Any hard searches carried out by lenders will be under ‘credit searches’.
What does it mean if I am ‘pre-approved’ for the loan?
When you get the results from our eligibility checker, you may notice that some loans are marked ‘pre-approved’. This is because certain lenders will pre-approve your application for a loan based on the information we’ve given them from our soft search. In most cases, it means that you can go ahead and apply with the confidence that you’ll be approved for the loan.
The lender will then carry out a hard search so that credit reference agencies can mark the credit application on your credit file. It’s also done to confirm your identity and check that you’re not a fraudster.
Just be aware that pre-approval doesn’t 100% guarantee you’ll get the loan. If something comes up in the deeper search that the lender isn’t happy with, there’s a small chance your application could still be rejected.
Is it worth applying for loans if I have a low probability of being accepted?
Each lender has their own criteria, so a low probability doesn’t automatically mean you’ll be rejected. When you compare loans, you’ll see a percentage next to each one. This is called an eligibility rating and shows what chance you have of being accepted for the loan. Although a 20% eligibility rating is pretty low, it still means you have a one-in-five chance of getting the loan.
But is it worth applying if your chances are so slim? If there are other loan offers with a higher eligibility rating, you’re probably better off applying for one of them. Remember, when you apply for a loan, a hard search will be marked on your credit file. If your application is rejected, then it could hamper your chances of finding another loan elsewhere.
What should I do if I’m refused a loan?
If you go ahead and apply, but are turned down, you should try to find out the reason why. It might be something you can rectify, so you’ve got a better chance of being accepted next time.
Whatever you do, don’t immediately apply for another loan somewhere else. It’s more than likely you’ll be rejected again – then you’ll have two hard searches on your credit file.
Check your credit report for any errors or debts you forgot about; a mistake on your credit file can be fixed quite quickly. Then take a few months to improve your credit score before applying again.
What types of loans can I check?
When you use our eligibility checker, we’ll ask you how much you want to borrow, how long you want to borrow for and the purpose of the loan: for example, home improvements, a wedding, buying a car or debt consolidation.
You’ll then be able to compare suitable loans. You can use the loan eligibility checker to find the following types of loans:
- Personal loan
Lets you borrow a fixed amount of money over a fixed term, typically at a fixed interest rate for the length of the loan. Personal loans usually range from £1,000 up to £25,000.
- Home improvement loan
Allows you to borrow a set amount for home renovations. You can choose an unsecured loan for smaller improvements.
- Debt consolidation loan
Lets you move outstanding debt from your credit cards, store cards, overdraft or other loans to one convenient monthly payment. Although it can be a good way to manage multiple debts under one single loan, you’re effectively taking on more debt - which could cost you more if you extend the length of your loan.