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How Loans are approved

A smiling woman holding a phone, indicating her successful loan approval. The image pertains to the topic of "How loans are approved."


Credit is a powerful tool that can help you achieve your goals, build wealth and meet your urgent needs. Therefore, it’s important to understand how a loan is approved. I.e the factors lenders consider to evaluate your application and make a loan decision.

Most of these factors, we’ve hinted at in other articles, but some of them are quite new, and paying attention to each of them and making sure they’re right before your application, would be key to getting you that loan.

Debt to income ratio

DTI is your debt-to-income ratio – it’s a percentage that compares how much you earn every month (before taxes) to how much you owe. It helps show lenders how much of your income you spend repaying loans and therefore gives them a good idea of whether you’ll struggle to pay back your potential loan or not. 

The lower your DTI, the better DTIs of about 50% may not even be considered by lenders, unless the applicant has a solid repayment history – so it’s best to aim for within the 30% range when considering your DTI.

Credit History

Your credit history shows how well you’ve paid off all your previous loans in the past and gives you a score between 300 and 850 based on how well you take loans and repay them. 

Your credit reports are hosted on National Credit Bureaus which are available to individuals, and the lenders who will assess your loan application. Here is a table showing how the scores are ranked for your credit report:

  • 720+: Excellent 
  • 719 – 690: Good
  • 689 – 630: Fair
  • 629 – 300: Bad

Consistent income & Cash flow

To be confident you can pay back the interest on your loans, lenders want to be sure that you’re receiving consistent income or earnings in your accounts every month. So, you want to make sure that any bank account information you’re providing shows a steady income coming into your account over at least 6 months.

But that’s not all – Lenders don’t just look at what’s coming into your account to make a lending decision – they also look at what’s left in your account after a specific period every month, quarter or year. This is known as your cash flow, and it can be defined as the balance between your income and expenses over a certain period.

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Personal loans are great, right? They offer sizeable amounts of money to help us achieve our life goals like getting an education, buying a car, renovating a home, or even paying the rent.
An instant cash loan also referred to as a quick cash loan, provides immediate access to funds, as the name implies.

22 thoughts on “How Loans are approved”

    1. Hi there, We're sorry for taking this long to get back to you.
      You can easily apply via the website or by downloading our mobile app from your device store.

  1. Rasaq kafayat lolade

    Pls help me true with this loan application, pls I really need it and I we return it early next month is very urgent

  2. Dear Renmoney Team,

    I am writing this letter to formally apply for a loan to the tune of #2.2mil from your esteemed organization. I have carefully considered my financial needs and have identified two specific reasons for requesting this loan.

    Firstly, I require financial assistance to clear a consignment of food supplements. By obtaining the necessary funds, I can ensure the timely clearing of these products.

    Secondly, I intend to utilize a portion of the loan to invest in the digital marketing of Sunday School management frames and boards. By implementing an effective digital marketing strategy, I anticipate a significant increase in the visibility and sales of these products. This growth will not only benefit my business but also contribute positively to the Sunday School community.

    If my loan application is approved, I assure you that I will diligently repay the loan within a period of ten months. I am committed to meeting all the terms and conditions stipulated by the organization and will adhere to the agreed-upon repayment schedule.

    I appreciate your time and consideration, and I hope that you will look favorably upon my loan application. I am confident that with your support, I can successfully address my business needs and contribute to the growth and prosperity of my enterprise.

    Thank you for anticipatedcooperationandsupport.


    Aje Clement

  3. Egbadu Faith Emmanuella

    I have been trying to apply for loan yet the app is not function.... please I need help with this

  4. Egbadu Faith Emmanuella

    Incomplete process yet I can't access the loan and a message was sent to me yet nothing.
    Infact chatting with renmoney team on the app is totally not helping at all,it's frustrating

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