In earlier times, getting a loan was as easy as going down to the nearest bank and asking for it. These days, investors and lenders need to be a hundred percent sure they would get their money back before they even take any amount of cash out. In this article, I’ll show you that it’s still easy to apply for a personal loan if you just know what to do and how to do it.
Give your local bank a shot before everything else. Here’s a good place to start. The neighborhood bank or the nearest lender you know. Since you live just within the vicinity, lenders will be more confident in loaning you the amount of money you need. Plus, if you know someone from the bank, say the teller, you could hope he/she throws in a good word for you.
Be direct. If asked about the reason for applying for this loan, state your explanation as brief and as directly as possible. If it is of importance, you wouldn’t have much problems getting this loan approved.
Get your facts straight. Get to know everything you could about applying for a loan such as the interest rate and loan processing fees. This way, you won’t go around closing a deal when you don’t know which one is actually better.
Due to the economic crisis, the percentage of declined loans has greatly increased. Today, only those with good credit and high paying jobs still find it easy to apply for a personal loan and have it granted in a jiffy. But what exactly causes denied loan applications? Know what to avoid on your next application:
1. Bad Credit. Lenders automatically refuse to loan money to people who have had bad credit. Some though, give higher APR’s to those who have minor cases such as late payment, etc.
2. The Absence of your name on the Electoral Register. Debtors who are not on this list are most likely difficult to trace. Therefore, lenders refuse to give to those who may possibly “run away” from their debts. Those who can easily be reached such as home owners are easily granted such loans.
3. Your Credit-Income Ratio. Those who have a greater amount of debts than income are most likely to be declined. Lenders make it a point that every loan applicant’s capacity to pay is thoroughly assessed.
Most important of all try to reflect whether you really need to get this loan or not even before you decide to apply. This will save you all that time and effort in case you realize that you don’t need to do this. Think whether it is necessary for you to apply for a personal loan or if you could do away with having debts at the moment. While it is helpful to be able to get loans when needed, it is still best if you avoid doing this unless there is an emergency.
Remember that for every loan you make, there’s a risk for you to get a bad credit rating. If you’re not sure about being able to pay the amount every month until you’ve paid in full then it is advisable not to borrow money. A bad credit rating will affect your future reputation, something you might want to take care of in case a real emergency comes.