When you need to buy a car, pay off some bills, repair or remodel your home, or even buy a home, there are loan products to help out. While applying for each type (car loan, personal loan, home equity loan, or mortgage) requires a slightly different process, there are some common threads. Here are some tips to help you get the loan you need.
Loan approval, limit and interest rates are typically based upon a combination of:
Check Your Credit Report and Score: Request a free credit report from Experian, Equifax and TransUnion at AnnualCreditReport.com. Credit card companies and banks sometimes offer a free credit check to their customers. Review the information and have any errors corrected before applying for your loan. Although every lender uses a slightly different formula to determine a credit score, most will be in the same ballpark.
Research Loan Requirements: Get an idea if you’ll qualify before applying for loan at a particular bank or credit union, so you can limit the number of financial institutions that have your sensitive personal information and check your credit. Credit inquiries can lower credit scores slightly, for a short period of time. Ask lenders you’re considering about credit score requirements for auto, personal, home improvement or home loans, (or check online).
Shop for the Best Loan Terms: Consider interest rates offered and whether the bank offers a repayment period that is comfortable for you. You may have a better experience if you choose a local bank--one that you can actually visit to apply for your loan and for any questions along the way. Establishing a face-to-face relationship can be valuable for your future financial needs--and you'll be contributing to your local community's economic growth.
Gather loan application details and documents. Details you’ll need for your loan application (and lender verification) include:
A good way to start looking for a loan is by visiting a community bank or credit union. Talk with a loan officer to discuss your funding options.
Smaller banks may offer:
These steps should set you on the path to loan approval. For more tips on banking and financial health, visit our Bundlefi blog regularly.