How to Get Your Personal Loan Approved
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If you’re looking for a personal loan, you’ll want to make sure you get approved. Here’s a guide on how to get your personal loan approved.
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Review your credit report
One of the first things you should do is pull your credit report and score. You’re entitled to a free copy of your report from each of the three bureaus once a year at AnnualCreditReport.com, and you can check your credit scores for free on Credit.com. Check for any errors on the report and dispute them with the credit bureau, which could help improve your score. Even if everything looks good, take some time to understand your credit score and what factors are influencing it. The better your score, the better interest rates you’ll be able to qualify for on a personal loan.
Shop around for the best rate
The first step to getting a personal loan is to shop around for the best rate. Each lender will have their own requirements for what they consider to be a good credit score, so it’s important to compare rates from multiple lenders. It’s also important to compare the fees associated with each loan, as some lenders may charge origination fees or prepayment penalties.
Once you’ve found a lender you’re comfortable with, it’s time to start the application process. Most lenders will require you to fill out an online application, which will ask for information such as your name, address, and Social Security number. You’ll also need to provide information about your employment history and income. Be sure to have this information handy before you start the application process.
After you’ve submitted your application, the lender will review your financial history and make a decision about whether or not to approve your loan. If you are approved, you’ll receive a loan offer outlining the terms of the loan, including the interest rate and monthly payments. Be sure to review the offer carefully before accepting it, as you may be able to negotiate a better interest rate or terms.
Get a cosigner
One way to improve your chances of getting approved for a personal loan is to find a cosigner. A cosigner is someone who agrees to sign the loan with you and be equally responsible for repaying it. This makes the lending decision easier for the lender because they have another person to shoulder some of the risk.
Your cosigner will need to have good credit and a steady income to qualify. They should also be prepared to make payments on the loan if you’re not able to do so. Keep in mind that if you default on the loan, your cosigner’s credit will be impacted as well, so it’s important to choose someone you trust.
Consider a secured loan
A secured loan is one where you offer an asset, such as your home, as collateral against the loan. The advantage of a secured loan is that it usually comes with a lower interest rate than an unsecured loan.
The main downside of a secured loan is that you could lose your home if you can’t repay the debt. For this reason, it’s crucial that you only consider a secured loan if you’re confident that you can make the repayments.
If you do decide to go down the route of a secured loan, there are a few things to bear in mind. Firstly, the asset you use as collateral will need to be valued by the lender, so there could be associated costs. Secondly, it can take longer to arrange a secured loan than an unsecured one, so make sure you factor this in if you need the money quickly.
Borrow from a friend or family member
If you have a good relationship with a friend or family member, you may be able to borrow money from them. This is often the best option, as the interest rates will be lower than those of a traditional lender. However, it’s important to make sure that you can repay the loan in a timely manner, as defaulting on a loan from a friend or family member can damage your relationship.
Use a credit card
One popular way to make small purchases is by using a credit card. In order for this to work, you’ll need to have a good credit score and use the card responsibly by making payments on time and in full each month. If you’re able to do this, then using a credit card can be a great way to finance small purchases. You can also use a credit card to finance larger purchases, but be aware that this will likely come with higher interest rates.
Home equity loan
A home equity loan is a type of second mortgage. Your first mortgage is the one you used to purchase your home, but you can place additional loans against the property as well if you’ve built up enough equity. Home equity loans allow you to borrow against your home’s value over the amount of any outstanding mortgages against the property.
For example, if your home is worth $300,000 and you owe $100,000 on your first mortgage, you have $200,000 in home equity. You may be able to borrow up to $100,000 in a home equity loan or line of credit, depending on the lender’s policies.
