These days, getting a bank loan isn’t the easiest process in the world. The recession is behind us, but some of the tight-pocketed sentiment still exists in the financial sector. Although things have improved, banks are still fairly strict in the criteria they want you to fulfil. There is a range of elements to a good loan application. Here are just a few important things to keep in mind when looking to getting a loan approved.
What do you need from your loan?
First of all, be fairly certain in what you want from your loan. It really won’t give off the right impression if you walk into your bank and say “Gimme some money!” Make sure you do some homework in advance. Have a set idea of the kind of loan you’re going for, what you can afford, and your plan for repayment. There are dozens of different packages out there. Within each different category, there are going to be a few other options available to you. If you start liaising with bankers, and don’t know what you’re looking for exactly, you’re not going to come off too well! You might already have one in mind which seems perfect. Even so, shop around!
Father and teenager signing loan contract
Managing expectations
You should know what to expect from the process overall. Applying for a loan in a hurry, unless it’s absolutely necessary, isn’t a good idea. The people in charge of approving your loan are going to have some strict rules to follow, both in the approval and getting the money to you. Be sure to talk to an advisor, or someone at the bank, about all the different phases of the process.
Some loans can be pre-approved in advance. This is essential with mortgages; if you don’t get a mortgage pre-approved, you might miss out on some of the best homes for sale! With others, it can take a matter of weeks or even months between the approval and transfer. If you’re left waiting around, ask your loan officer about the process of following things up. Go about this the wrong way, and you’ll only hurt your position. If you apply repeatedly to loans, and barely get any of them approved, it can be extremely detrimental to your credit score.
What you can and can’t do
While you’re browsing all your different loan options, be aware of what you can and can’t do. This may require you to check your credit report. Consider your history and your current score, and anything you can do immediately about it. The state of a credit score often means the difference between approval and denial.
Because of this, it’s not only important that you try to improve it, but also check that it’s accurate! If your credit rating upholds that you have an unpaid debt you paid years ago, act quickly to have this removed. I know that something so weighty and official has a “set in stone” air to it. Don’t be fooled though! You’d be shocked at how often there are discrepancies in credit reports.