How to Qualify for Bank Loans
Qualifying for bank loans requires building a positive credit history and keeping a stable job. When banks loan customers money, they risk never being repaid. Lenders minimize these risks by working only with those customers they deem low-risk. But even those who have credit problems can work over time to rebuild their standing and eventually qualify for bank loans.
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Instructions
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Pay all your bills on time, including rent and utilities, to best qualify for a bank loan. Even paying utilities late could lead to collection accounts, which can taint your credit record.
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Borrow only what you need to stay qualified for the most lending options. Any credit cards you have should have at least 50 percent of their credit limit available.
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Apply for credit only when you need it. Each time you make a loan application, the lender looks at your credit profile. This places an inquiry on your report, which shows other lenders you are seeking credit. Seeking too much credit can be a sign of financial trouble, and this in itself can disqualify you from the loan you want.
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Stay at your job and residence for at least six months, preferably a year, before applying for a bank loan. Residential and job stability are important indicators of a low-risk client. People who change jobs or move a lot may have financial problems in the eyes of lenders.
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Make your checking accounts, savings accounts and retirement accounts at one local bank. This will help you become a preferred customer, making it easier for you to qualify for bank loans. If you have bad credit, consider asking the bank to issue you a secured loan against your savings or retirement account, and pay it on time before applying for unsecured loans.
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Apply for a loan once you are well established with the bank of your choice, your job, your residence and your credit profile. If you do not succeed, be sure to ask the representative what you can do to make future loan applications more likely to be accepted.
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Tips & Warnings
Remember that there are also finance companies and credit unions that offer loans, and they may have less stringent qualifications than banks. You could also consider getting a co-signer to guarantee your bank loan application.
