If you need a personal loan, mortgage, or payday loan, you know you need to successfully complete the application process. The problem is that it can be nerve-wracking to approach a lender for money. Luckily, you can improve your chances for approval a number of ways:
1. Prepare well in advance. Order and read your credit report to see whether you qualify for prime rates or subprime loans. Knowing what you qualify for should change your plan of attack. If you have enough time, you can even repair your credit score to qualify for a better rate. Before approaching any lender, make sure that you pay down your unsecured loans as much as possible to boost your chances.
2. Research loans and lenders before you apply. A mortgage lender may require you to provide five years of income statements. Most lenders offering payday loans, however, have a simplified one-hour application that only requires some basic proof of employment. Obviously, lender requirements vary widely. Learn about the requirements for the loan you need and you will improve your chances of an acceptance.
3. Make it easy for a lender to say “yes.” Always fill out forms fully and honestly and provide all the supporting documentation your lender needs. Make your paperwork neat, clear, and legible. If you need to meet your lender in person, act and dress professionally. When you make the lender’s job easier, you improve your odds of an approval, too.
4. Have a clear plan for how you will use the loan. Whether you are applying for a personal loan, mortgage, or payday loan, lenders want to know how you will use the money. Having a solid plan for how you will use the funds shows the lender that you are responsible and serious about paying back the loan.
5. Consider a co-signer. If you have a low credit score or don’t meet the lender’s income requirements, consider finding a co-signer for your loan. A co-signer is someone who agrees to take responsibility for the loan if you are unable to make payments. Having a co-signer can improve your chances of approval and may even help you secure a lower interest rate.
6. Don’t apply for too many loans at once. Every time you apply for a loan, the lender will run a credit check. Too many credit checks can negatively impact your credit score and make lenders hesitant to approve your application. Only apply for loans you are confident you will be approved for and limit your applications to one or two at a time.
7. Shop around for the best loan. Don’t settle for the first loan offer you receive. Shop around and compare rates and terms from different lenders. Look for a loan with a low interest rate, reasonable fees, and manageable repayment terms. By doing your research, you can find a loan that meets your needs and improves your chances for approval.