Applying for a bank loan is easy, but getting approved is tough. Borrowers need to be well prepared before applying to increase their chance of getting approved.
Regardless of the borrowers' credit, if they head into the bank unprepared before applying for a loan, their chances of getting approved significantly drop. If they take the time to prepare before they go to the bank, there are little things they can do that will significantly increase the likelihood of the branch manager approving their loan.
One Chance to Get It Right When a borrower tries to secure a loan at the bank, he or she only has one chance to get this right because if the bank denies the application, every bank after that will see the negative strike and follow suit. Once he or she completes the loan application and gets denied, the borrower doesn't have a clean slate to work with at the next bank, so things just get harder from then on out. If the borrower doesn't need that money right this minute, he or she should step back and take a more systematic approach to be placed in the best position to getting approved.
Boosting Credit Scores Banks rely heavily on a borrower's credit scores to determine his or her eligibility for the loan. The best thing to do initially is to order a copy of all three credit reports, and then look for any errors. If anyone disputes the error and the reporting agency doesn't respond, it can be removed. Many online credit reporting agencies offer tips on those reports how to boost a borrower's credit scores by consolidating cards, raising minimum payments and paying down more debt so there is less in the debt-to-income ratio.
Creating a Detailed Plan of Attack Going to the bank and asking for $10,000 to go on a tropical vacation might not be the best approach. Borrowers should create a detailed list of how every penny is being spent, how long they need the money for and what their ability to pay back the loan will be as these can have a positive impact on their ability to getting approved. The bank representatives are into numbers, so they want to see how much a borrower needs, why he or she needs it and exactly how fast he or she can pay it back.
Backing Up Claims Telling the risk department at the bank that the money will be repaid in a year is one thing, creating a statement with itemized details about how the money will be earned to pay them can make the process go easier. Whether a borrower is getting a raise or coming into an inheritance, detailed proof on paper will make it more likely for the bank manager to be at ease about loaning him cash. If the borrower can list assets that he or she is willing to put up against the loan, which can go a long way in getting approved.
If a borrower is going to the bank today for a loan, it only makes sense to prepare so the borrower has the best possible chance of getting that approval. The best way to get a bank loan is doing everything possible today to boost credit numbers and prove that the money will be repaid.