If you are looking to take out a bank loan then you might consider the process before applying, to make sure that your chances for acceptance is at the highest level possible.
Bank loan preparation
You will need to do some preparation before you step foot in a bank to start your application.
- Do you know your credit score and have you checked a copy of your credit report? If the answer is no to both of these then you must do these first. Make sure your credit report is accurate, as mistakes do happen and can have an effect on the outcome of a loan application.
- Understand the amount of money that you need and the amount that you can comfortably afford to pay back each month. The questions asked by banks are there for them to see if they think you have the spare capital, with which you can pay the monthly premium.
- Understand the rules required for your application. If it is for a car or a mortgage, make sure you are aware of any stipulations, requirements and product fees before you process your application; hidden fees can sometimes be added on to the loan, but this practice is not always the best option.
- Ask the bank to provide information on the credit score range they are likely to accept, if you have a great credit score it dosen’t mean that you will get the loan, it will depend on if you meet their criteria, too.
- Ask for a checklist of the documents that you will need to process your application; getting these prepared in advance can save time.
- It is important that you have preparation time before arranging an appointment, have all the documents in place and check your credit report. Know what type of loan you are applying for and the term that you wish to take it over.
- You must have confidence and be ready to discuss your application in full; remember your manners, there is no longer a requirement for you to dress smartly and it is more than likely your appointment will be with a staff member who has training to make the most sales from each appointment.
There are many ways that you can influence the decision for a loan agreement, but the best way is to ensure that your credit report is in the best shape and has a great score. You need to afford the loan and this means that you need to have an income, and there is surplus each month after you have paid off your bills, to afford the new credit agreement. A great credit rating is no guarantee of success.
In finance, a loan is a debt provided by one entity (organization or individual) to another entity at an interest rate, and evidenced by a note which specifies, among other things, the principal amount, interest rate, and date of repayment.
Most banks’ computer system will generate information as to the likelihood of an application being successful; if the system says that there is a high probability of failure, it is important that you walk away. A failure will show on your credit report and this could jeopardise future credit applications.