Are you in a financial difficulty and need some assistance? Well, the best way is getting a loan from your lender of choice. However, getting a loan has become trickier because lenders are very cautious. Because of this, many people end up getting their loan requests turned down. To be sure of getting the loan you want, here are 4 proven ways.
(i) Take your time to prepare
When you approach a lender, the main focus is establishing your creditworthiness. Therefore, you need to take ample time preparing.
• Review your credit report: The target here is raising the credit score so that the lender will not see you as a risky party. Check your credit report with about 3 credit bureaus to correct any errors. Ensure that all info including featured names, credit limits, and closing dates among others are okay.
• Put up a good source of permanent revenue: Every lender will scrutinize your source of income to assess your capability to repay the loan. If employed, this is not a major problem. However, if you have a business, the books of accounts should be well audited and presented to the lender.
• Outline how you want to use the money. If you want to open a martial art center, provide details of the things you want to buy from http://www.tigerstrike.com/equipment/sparring-gear/foam/. If you want a new car, you might want to give the detail of the new model and details of the seller.
(ii) Evaluate available credit options
Today, there are diverse loan options that you can go for. The main ones are secured and unsecured. If you opt for secured loans, the lender will require you to provide some collateral. The main collateral options accepted by lenders include homes, boat, and cars.
If you go for unsecured loans, the lender shoulders all the risks. Therefore, the borrower is not required to place any form of collateral. However, interest rates on unsecured loans are very high and are only provided to those with very high credit score. The commonest examples of unsecured loans are personal loans and small business loans. Note that with the small business loan, a proof of business profitability has to be provided.
(iii) Check for an appropriate institution to borrow from
While many lenders have opened their doors for clients to seek credit, you need to find the ideal one for your situation. Take a closer review of the lenders, read their history, and customers’ reviews to use the best. Main sources of loans include banking institutions that provide auto loans, personal loans, credit card loans, and small business loans.
Payday enterprises also come in handy to provide people with fast loans. They are easy to apply and approve loans within a timeframe of 24 hours. However, they only give very small loans and charge very high interests because they are unsecured. Before you go for the payday loan, take time to check the interest rate.
If you do not feel comfortable applying for a loan in a formal financial institution, you can also seek assistance from close friends and family members. Approach members of your extended family and seek assistance with a good payback plan. Many will be willing to help if you can commit to repay the money.
(iv) Do not apply for loan from two institutions at a go
Some people might suggest that you apply to several institutions to raise chances of getting approved by at least one of them. This is a very bad idea. When you apply for a loan with a financial institution, your credit score drops as the institution checks for your credit report. This could compromise your chances of getting a loan because of low credit score. Therefore, only apply for a loan from one institution at a time and if denied, review the cause for disapproval before moving to another.