How to Get Approved for a Bank Loan

Save
Get Approved for a Bank Loan
Get Approved for a Bank Loan (Image: Flickr)

Whether you want to consolidate your debts or start a new business, if you don't have the available cash, you'll likely need a bank loan to meet your financial goals. Unfortunately, banks have tight lending guidelines, and not everyone qualifies for a loan. Before completing your application, familiarize yourself with the bank's lending requirements, and do everything in your power to guarantee an approval.

Maintain an excellent credit score. Order a copy of your free credit report from Annual Credit Report. Is your score low? Do you have a high debt-to-income ratio? If so, create a debt elimination plan and resolve to pay your bills on time. This increases your FICO score and improves your approval odds.

Provide proof of steady employment and income. Before a bank approves your loan request, they'll request information about your financial history. Be prepared. Bring copies of your most recent paycheck stubs. If you're self-employed, bring your tax returns for the past two years.

Use collateral. There are two types of bank loans: unsecured and secured. Unsecured loans are difficult to obtain, and they are reserved for individuals with a superb credit rating and high income. Secured bank loans are easier to acquire. However, you'll need to provide collateral such as a vehicle title, electronics or jewelry.

Get a co-signer. If you have less than perfect credit or a short credit history, use a co-signer and improve your chances of qualifying for a bank loan. Choose a co-signer with a good credit history, and make sure they understand the co-signer agreement. If you default on the loan, they become responsible for the debt.

Compare loan rates. Contact a broker and request loan rates from multiple banks. This way, you get the best rate on the loan.

Related Searches

Promoted By Zergnet

Comments

You May Also Like

Related Searches

Check It Out

4 Credit Myths That Are Absolutely False

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!