When people think of loans, they usually think about things like car loans or business loans, but the truth is that there is another category of loans as well. Personal loans typically have low ceilings and they are unsecured (meaning that you don’t have to put up any collateral like a car or a house). They can help you out of a tough situation, but you will also find that they can be rough to acquire because the bank has nothing to seize if you default. When you want to put yourself in the best possible position for getting a personal loan, there are a few things to keep in mind.
Understand Your Credit Report
One important document that your bank will be using to determine whether you can get a loan or not is your credit report. Far too many people think that their credit report is bad and leave it at that. The truth of the matter is that if you know what is on your credit report and if you know about how it got there, the bank is going to be much more likely to listen to you. Take a moment to think about what your options are and how you can learn more about what this document says about.
Be Clear about Why You Want Personal Loan Approval
When you are asked what you need the money for, be as clear as you can be. If you simply say that you need the money for debts, you will find that it is very unlikely that the bank will approve your loan request. For many people, this is where they fail when they are applying for a personal loan. On the other hand, if you can state clearly and concisely what you are using the money for, you will discover that the person in charge of making the decision can be much more sympathetic. Creating more debt to pay off old debt is never a good idea. having a specific purpose such as a new computer is much better. However, if you listen to “Rich Dad” he would say even a computer isn’t a good reason to get into debt, unless it is going to be used to produce income greater than it is costing you (thus it becomes a productive asset).
Be Honest
It does you absolutely no good to lie on your loan application. In most cases, the lies that you tell on your application will be found out very quickly. Banks have a very streamlined way to check in on the information that you give them, and if any of it is false, they will figure that out very quickly! When you want to make sure that your application goes through without a hitch, be clear about where you have been and what you have done. A lie gives them a very good reason to toss out your application.
Be Ready
When you are applying for a personal loan, often you will hear back very quickly. Both yes and no responses can be given in very short order, so take a moment to prepare yourself. If the bank calls you in for an appointment or a consult over the phone, make sure that you have your items close to hand. This preparedness is something that might make or break you, so be ready as soon as you have turned in your application. Too many people end up interfering with their own chances for success by failing to prepare in this fashion. If you want to get a personal loan, be ready to take the call whenever it occurs!
See Also:
- The Wealthy Buy Assets, the Poor Buy Liabilities, and the Middle Class Buy Liabilities Believing They Are Assets
- Bad Financial Advice Abounds
- Choosing The Best Bank
- Teaching Your Kids Money Management Skills
- How to Up Your Credit Score
Recommended Books:
- The Complete Idiot’s Guide to Person-to-Person Lending
- Personal Finance in Your 20s For Dummies
- Your 33 Day Money Action Plan: How to Get Out of Debt, Save Money, Discover Financial Peace, and Revolutionize Your View of Money Forever
- If Stupid was Illegal we’d be in Jail: Our personal journey through financial stupidity
Byline
This piece was contributed by Arnold Costanza, a freelancer who writes on finance, investment, real estate, banking, international business and commerce, and other topics as well. For more information on finance and taxation contact RG Brenner.
Image courtesy of Stuart Miles / FreeDigitalPhotos.net