Helpful tips when considering a personal loan
Tip 1 - Plan your loan early.
In most cases it can take several weeks to close a
loan, because of the wide range of types, sizes, methods of operation,
and levels, different loans are very different, and each is unique with
its own nuances and complexities. In most transactions, the loan request
must first be underwritten and approved by the lender and then reviewed
and approved. Once a loan is approved, it can take from 30-60 days to
fund. Borrowers can dramatically speed-up the process by supplying all
of the necessary documentation up front.
Tip 2 - Get your documentation in order.
One of the first tasks before you approach a
lender, is to obtain a copy of your personal credit report. Check it
carefully for any inaccuracies or mistakes. Make certain that all
accounts are current and there are no outstanding judgments or liens. If
there is any derogatory information, it is better to be proactive and
prepare a letter explaining what led to the problems and why the problem
is not likely to occur again. Then you need to gather all of your
personal and/or business records for the last years, including: tax
returns, financial statements and attachments, and anything else that
you believe would help a lender.
Tip 3 - Define your goals.
Evaluate your needs and purpose for borrowing
funds. Never tell a lender that you want to borrow as much money as
possible. Rather, you should have a specific amount in mind and the
paperwork to show why you need it and how you will pay it back.
Tip 4 - Be aware of your strengths and
weaknesses.
Loaners are traditionally confident and
optimistic, while lenders are often perceived as conservative and
sometimes pessimistic. Identifying your strengths and weaknesses will
help you bridge this ideological gap. Some of the most common weaknesses
lenders find are: inability to demonstrate repayment ability,
insufficient cash and poor personal credit. Depending on the severity of
any particular weakness, you can often overcome it if you are prepared
with a particularly noteworthy and compensating strength.
Tip 5 - Find an experienced lender.
Good lenders will be able to prequalify you with a
minimal amount of information and without completing the entire
application. The entire prequalification process should take no more
than a few days. If it takes longer, it is probably indicative of the
lender's inexperience and you may want to consider finding a new lender.
In the end, you should complete the process with an excellent loan
product and outstanding terms that are tailored to fit your needs.
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