Instant Approval
November 30, 2020

Online lending has removed the drawback of traditional lending under which people had to wait for a couple of days and go under umpteen formalities to have the lender sign off on your loan application. It is not surprising to be running out of money when an emergency pops up. Just imagine you have fallen sick in hospital and you do not have money to foot the bill outright and you have to wait for a couple of days to have the loan approved. Well, this ugly scenario is no longer forming into reality.

Borrowing money has become far easier. All you need to do is to fill out the application form, and you will get money the same day in your account, thereby such loans are also addressed as 24-hour loans in Ireland. If you look at the other side of the coin, you will find that traditionally it used to take much more time to lend money because lenders had to check bank statements and past payment records to find if the borrower could afford to pay off.

Modern lending, on the contrary, disburses money the same day you put in the loan application. Does that mean lenders are cashing in people? Do they not check their affordability before approving? Get the answer here.

What is the affordability check?

You all know that you can qualify for a loan only when you can afford to pay off the money you are borrowing.  Will a lender turn down your application immediately otherwise?

For instance, both A and B applied for a cash loan worth €500, and they earned the same money, but A got the approval and B did not. You may think that the latter did not get the approval because he could not afford to pay it off. Would you have the same opinion if you were told that A was more prodigal than B? Now you will give scratch your head.

The definition of affordability is not just what you think. It is much broader than your knowledge. A lender will evaluate if you are left enough money after meeting all of your regular expenses to repay the debt, your previous payment record, credit score, and employment stability. It means even if you have enough income, you will likely be cast aside if your credit score is poor or you have been switching jobs very frequently.

What does make affordability check so fast?

Traditional lenders used to take a couple of days to assess the strength of the loan application, but now this entire process is done within a few hours. What makes it happen so quickly? Technology! When you fill-up the online application form, all your details get stored with the lender.

Suppose your last application has not been six-month-old. In that case, the lender will not run an in-depth evaluation since advanced technology has made it easier for credit reference agencies to keep the record of credit files of millions of borrowers that they can share with lenders just in a minute.

You cannot just rely on them

Just because lenders check if you will be able to afford repayments does not mean that you should not bother about it yourself. Whether you need to borrow €100 or €1,000, a good rule of thumb says that you should analyse yourself if you can quickly repay the debt. You are borrowing money so that you will bear the ramifications of defaults. Remember that you will have CCJ issues against you if you fail to settle the dues.

Even though lenders aim to help you during emergencies, but the market still seeks to make some profits. It is always advisable that you should check if you have enough money set aside to make repayments. Use online calculators to estimate the total cost of the loan. Although it cannot reveal an exact value, it can at least give you an idea of how much it will set you back.

Now that you must have understood that instant approval policy will never compromise with affordability check. However, you should also be careful about your affordability at the time of borrowing money. Try not to borrow when you cannot afford.

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