Are you thinking about qualifying for a personal loan? Whether you need a secured loan, an unsecured loan, a personal loan or a mortgage, it’s critical to understand what you need to do to make the loan process run smoothly. If you’re planning on applying for a loan, start putting our 8 tips into place and you’ll soon hear those wonderful words, “You’re approved!”
Many find themselves in the position where they are need of a loan. It can make owning your dream house come true or help your family.
Tip #1: Improve Your Credit Score
One of the first things a loan officer does is to check your credit score. While this can make some people feel a little anxious or even let down, do keep in mind that you can always improve this score. There are things you can do right now to improve it, so when the check is run, that rating will be the very best it can be.
Here are the credit rating score scales:
Excellent credit 760+
Good credit 700+
Fair credit 640+
To start, obtain your credit scores from the 3 bureaus Equifax, TransUnion and Experian. You can do so once each year for free, without the request affecting your credit rating. Now if your score is 690, if you can raise it by 30 points then you’ll be much close to having Excellent credit. Make your focus working toward the next score scale.
Tip #2: Review your credit report for any errors.
It can feel a little intimidating when you’re thinking about getting a loan and you see a couple of “dings” on your credit reports. But examine them carefully, are they accurate? If you have any questions, contact the credit bureau about them. Remember there are many people who have the same first and last name that you do, clerical errors can occur and it is best to follow up if you do not recognize something on your credit report.
Tip #3: Make current credit card payments on time & pay off debts
This is something you can do right now. For most of us, this takes at least several months to do. Make the effort to pay credit cards and other debts in a timely manner. When you apply for a personal loan, this will be noted and your previous history will be looked at positively.
Tip #4: Decide what type of personal loan is best for you
Which personal loan you want to apply for often depends on what you will be doing with the money. Some choose a secured loan, where you put property up as a guarantee for repayment of the loan. Others choose an unsecured loan, where no property is required to obtain the loan. If you are buying a new home, you may want a mortgage.
Tip #5: Understand who will be responsible for the loan
If you’ve never applied for a loan before, the bank may require you to have a co-signer. It is best if you think about this ahead of time, so you have one or two people who are prepared to co-sign the loan for you. Most people will not co-sign a loan without thinking about their own finances first, even if you are a close family member or someone they care about deeply. There may be other circumstances where you’ll need to think a bit about who will be responsible for the loan, such as if you are recently married or have just gotten divorced.
Tip #6: Ask family and friends for recommendations for a reputable lender
Today there are more and more options as to where to find a personal loan. Don’t be “sold” by catchy commercials and jingles that you can’t stop singing after you’ve heard them on the radio! You want a lender who has great rating with the Better Business Bureau. One good way to start searching for a lender is to ask family and friends if they could recommend a company for a personal loan. Simply by doing this, you’ll create a list of companies to research and see who you could get a loan from.
Tip #7: Tell the truth
Most people who have applied for a loan will admit they’ve found it a bit intimidating. Why, you hope you are saying the right thing so you will get the loan you need. Just don’t lie on your loan application, or you’ll typically wind up in quite a pickle! For one thing, if you qualify for a loan you logically cannot pay off then this actually gives you a lot more trouble than anyone ever deserves. If you have a question about any of the questions, simply ask your loan officer for clarification so you can respond in the best way to the question.
Tip #8: Be patient & get excited!
Most loan officers will get back to you fairly quickly with the news you’ve been accepted for your loan. Some companies promise they will actually give you the news within days, if not a week! It used to be that customers would typically wait a few weeks for a final decision but those days are long gone. Lone companies now are customer-centered and want to respond to you as soon as possible, so you can get started on buying the home of your dreams, get the car you’ve always wanted or purchase whatever you’ve had your eye on with the help of a loan.