Tips to improve your chances of obtaining a personal loan
July 19, 2010 by admin
Getting your hands on a personal loan is becoming more difficult. Lenders are a lot more cautious than in the past but following a few tips can greatly increase your chances of securing that personal loan. As a result of a lower supply of personal and signature loans available, more consumers have turned to payday loans, which tend to offer higher interest rates and shorter repayment terms. Expectations differ between one lender and another but what follows are some general recommendations that will hopefully help you get your hands on that money you want.
Have a good reason for the loan and be able to clearly explain how you will pay it back
The days of getting huge loans for the vaguest of reasons are over. It is now a lender’s market and you will have to convince them of your need for a loan and be able to also explain how you will be able to pay it back. Expect to be asked to provide exact details about your personal spending and if you can’t provide these you should expect to be refused. Lenders these days want to be fully reassured about your ability to pay back before they will even consider you; it is your job to do this. If you don’t have a really good reason for applying for a loan the best advice would be not to apply in the first place.
Ensure that you have a high FICO credit score
Your FICO score is your reputation and without a good one a lender is unlikely to touch you. There are different ways you can go about improving your FICO score but basically these can be boiled down to having a good history with borrowing money in the past. If you have a history of late and missed payments or defaulting on loans then you are going to really struggle to even get the loan of a pen from one of these institutions. It is a good idea for you to become familiar with your credit report; that way you won’t be wasting your time by applying for loans you have no chance of getting. If your FICO score is low you should do all you can to improve it before applying for a loan.
Ask for the lowest amount you need
Don’t overestimate the amount you need to borrow; you want it to be as small amount as possible. This is not just to save you money on interest but also because the lower the amount the more likely it is that the lender will give you it. Asking for the lowest amount needed also shows the lender that you have thought things through and are not just picking figures from your head.