These days, getting a loan isn’t always a walk in the park. Most lenders have tightened their requirements for qualifying for a loan because of the losses they incurred during the economic downturn a few short years ago. More stringent qualification criteria means individuals with past credit blunders, those who have unstable income, or those who have several other monthly debt payments may need to put in more effort to secure the financing they need. Not all is lost in the loan market today, but it’s important for prospective borrowers to understand what it takes to get approved. Here what borrowers need to do when it comes time to get a loan.
Most national banks and credit unions have streamlined loan application processes that include an evaluation of a borrower’s credit history, income, and need for the loan. Because they serve hundreds of thousands of banking customers, loan reviewers are less apt to understand any deviations from the underwriting guidelines that make borrowers less than ideal candidates for a loan. Utilizing a local or regional bank or credit union may be a better option, as they are more willing to evaluate the borrower as an individual, not just a paying customer.
Other local lenders are also good options for securing a loan as they can tailor the loan agreement to meet specific borrower needs. For instance, TNL Car Title Loans in California has multiple locations a borrower can visit to see what they might qualify for in terms of a new loan. Car title loans are often easier to get than conventional personal loans because there is no hard credit check and the loan amount is based on the equity the borrower has in the vehicle.
However, if you’re in the market for an investment property loan, a fix and flip loan, or a regular home equity loan, you may have difficulty getting it if you need it quickly. Hard Money Lenders San Diego can help you get the loan you need when other lenders won’t work with you.
Whether it is a car title lender or another outlet, local lenders offer a more personalized approach to lending that is hard to find with large, national banks.
Have Your Ducks in a Row
No matter what type of loan a borrower is seeking, all lenders will have some degree of qualification criteria that need to be met in order to get the loan approved. Car title lenders require a free and clear title in the borrower’s name as well as a vehicle that has some level of value. Personal loan lenders, like banks, credit unions, and online companies often require verification of outstanding debts and minimum monthly payments, proof of income, and in some cases, bank statements to show other assets or savings on hand. Before applying for a new loan, be sure to have these requirements easily available and well-documented.
Know Your Credit History
Traditional lenders almost always perform a credit check before approving an application for a new loan. A borrower’s credit report includes information about current debts, previous debts, payment history, and percentage of utilization of revolving accounts, like credit cards. Anyone in the market for a new loan should be well aware of what’s in their credit report before applying. A black mark in one’s credit history that is incorrect or unknown cannot typically be overlooked by lenders, so it is beneficial to know what’s there – and work toward improving it – before submitting an application.
Although the requirements for getting a new loan are tougher than they used to be, borrowers can set themselves up for success by preparing ahead of time. Start by knowing the options for local lenders who offer a more individualized way of doing business, and follow up by getting documents in order. Review credit history prior to applying and correct or improve any negative marks. Taking these simple steps will boost the chances of getting approved for a loan with most lenders.
We used our local bank to acquire our new mortgage in 2016. This is because we already had a relationship with the bank and had fewer hoops to jump through being self-employed (that’s a whole different discussion there).
Since we bank at two different local locations, we did compare rates before starting the application process.
I went through a small mortgage company when I purchased my house and then my credit union when I refinanced. Both loan servicers I worked with spent time talking about the personal side of my numbers, and in the case of the initial mortgage I ended up with a better rate because of chatting about my job longevity.
I love having an actual relationship with a banker at my credit union and don’t know that I’d ever choose to finance through a large banking institution.
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