5 Wise Things You Can Do to Persuade Banks into Approving Loans
Whether it’s for personal or professional reasons, most people will contemplate taking out a loan at some point in their lives. Before this moment arrives however, it’s important to be prepared for the scrutiny that comes with borrowing money. Banks don’t just lend money out of blind faith. They prefer to transact with dependable people. Business Writer Lindsay Frankel suggests that “Most lenders will look at your creditworthiness, among other factors, to determine your interest rate. You should always evaluate the purpose of a loan to determine whether you need to borrow, and whether you have the ability to make payments… Carefully consider all your options before signing any loan agreements.” Here are a few tips on how to increases the odds of being approved for a loan:
1. Set the Stage for Your Loan-Request Months in Advance:
Whenever someone files a loan application, this prompts lenders to examine the applicant’s financial activities. They do this throughout a timespan of the past two years. If anything looks out of place, it discourages lenders from approving the loan. Be on your best financial behavior long before you ask for a loan. Manage your finances responsibly so that credit-checks don’t raise any red flags.
2. Avoid Opening Several Lines of Credit Simultaneously:
Every time you apply for a credit card, or get approved for any kind of institutional debt, wait for at least two months before applying for another loan. Asking for multiple lines of credit all at once comes across as a hasty grab for cash. It automatically disqualifies the applicant.
3. Pay Down Existing Debt:
The main thing that lenders are looking for from borrowers is proof that they can pay back debt. If you already have an outstanding balance elsewhere, pay it off, or bring it down by as much as you can afford to. This boosts your credit score and gives lenders a degree of confidence in your payment abilities.
4. Have a Consistent History of Income:
The easiest way to prove you can pay back a loan is with a history of income. Consistent income demonstrates that at the very least, you’ll be able to honor the minimum monthly payments when they’re due. The higher the income, the better.
5. Demonstrate that You Understand How to Live Within Your Means:
If your loan application involves a verbal interview, it’s usually because the lender wants to get to know you on a detailed level. Use such interviews to prove you have practical instincts. No matter how ambitious your plans for the loan are, show the lender that you understand the value of what you’re borrowing, and that you know what it takes to pay them back.
Taking out loans is a very elaborate process. It might seem like it’s just a matter of filing paperwork, but there’s a lot more bureaucracy behind the scenes. This is why you should always keep your ducks in a row and maintain a prudent financial profile. Be prepared for the vetting process, and set up the necessary conditions for repayment. Be responsible with your borrowing, and you’ll reap all the rewards. If you like what you just read from our blog, you’ll love the various informative courses, workshops and events listed on our websites and social media. Whether you’re interested in personal development, or overall improvement of your business, give us a call at 1 (888) 823-7757 to find out how The RISE Academy can help you break past your daily struggles and start soaring in success.