Tips for Getting a Personal Bank Loan
The best tips for getting a personal bank loan include practical advice that will make you more financially ready to apply for a credit account, whether it’s a personal bank loan, a car loan, or any other type of credit.
The Best Tips for Getting a Personal Bank Loan
Should I Review my Credit Report Before Applying?
Of all the tips for getting a personal bank loan you will find, the most important may be to review a copy of your credit report before you even apply. Your credit report is your history of acquiring and paying for debt. If you have always paid your debt on time then your credit report reflects this, and consequently your credit report will also reveal to lenders if you have a history of late payments and delinquent accounts. You need to know what is on your credit report before you apply for the personal bank loan for a few reasons:
- There may be errors on your credit report which need to be corrected or removed.
- If you already know what is listed on your credit report you’ll be able to competently respond to any questions about the report from the lender.
- Knowing your credit score beforehand helps you decide which lender to apply with since some lenders only deal with applicants who have high credit scores.
You should review your credit report periodically even if you don’t anticipate applying for credit in the near future.
What Should I Do About My Current Financial Situation?
Lenders look at different aspects of your financial health when making a decision about whether or not to approve your credit application. Although factors vary from lender to lender, you can make your application more attractive to most lenders by doing the following:
- Make sure every one of your credit accounts are currently in good standing.
- Have some money in a savings or investment account, even if it isn’t a substantial amount.
- Do not max out the accounts you already have.
You want to make your financial status appear as attractive as possible. Most banks and other lenders utilize an automated lending service, which means your application is approved or denied by a computer program instead of an actual human loan officer. Stacking the odds in your favor will increase the odds that your application for a personal bank loan will be approved.
Where Should I Apply?
You may have better chances of having your application for a personal bank loan approved if you apply through a lender you already do business with. Some lenders give preferential treatment to existing customers. If this isn’t an option then look for lenders congruent to your credit standing. In other words, if your credit score is extremely low you will want to look for lenders that advertise loans for people with bad credit. You should also realize that lenders specializing in loans for people with excellent credit oftentimes offer the very best interest rates and terms, so if your credit score is high then you should apply with these lenders.
What if I Don’t Qualify for an Unsecured Personal Bank Loan?
Personal bank loans are usually unsecured. Personal loans are often referred to as signature loans, which means there is no collateral backing up the loan…only a signature. If you are unable to get approved for a personal bank loan because of bad credit then you may want to explore getting a loan secured by some form of collateral. Most banks and credit unions offer loans secured by equity in homes and cars at attractive interest rates. Most signature loans come with relatively high interest rates unless you have an impeccable credit score and find a lender currently offering a special interest rate on personal loans. Be sure to research all the options available to you before applying for a personal bank loan.