Sometimes you’re in a financial crisis that requires immediate fixing. Quick loans serve as the right solution that puts cash in your pocket when you need it. However, while it may seem easy to search for a lender and apply for the loan, most people rush things only to find they cannot get approval. Moreover, without proper knowledge, the loan application process can get complicated, painstaking, and time-consuming. To avoid these negative scenarios, follow these easy tips and get your loan in no time.
Review your finances
The last thing you want is to take out a loan that you’re unable to afford to pay it off. While the lenders will do their due diligence to ensure you can repay the debt, it’s wise to run your numbers and make sure it’ll work out. You can start by determining how much you need, but keep in mind that some lenders will charge an origination fee that is deducted from the loan proceeds. So, ensure that you borrow enough to cover the fee and your financial needs. You can also use the debt-to-income ratio (the financial comparison of a person’s monthly debt to their monthly gross income) to determine how much of your salary will be used in loan repayments.
Check your credit score
Most lenders require that you have at least fair credit, and hence knowing your scores helps you determine if you meet the eligibility criteria. Excellent credit offers you the best chance of being approved with competitive interest rates. That’s because an excellent credit score indicates that you can be trusted and are a disciplined borrower. If your score is low for some reason, you can still get a loan, but the fees and interest rates might be too high. Fortunately, you can improve that risk equation in the future by following these credit score improvement steps:
- Pay bills in full and on time
- Spend less than your credit limit
- Avoid external aspects that affect your history negatively, such as bankruptcy or foreclosure
- Keep old accounts as longevity counts when it comes to credit history
Research the loan market
You should avoid settling for the first offer you get. Instead, you need to take time and shop around for the best and competitive loans in the market. You should also check for the prequalification process to limit the effect of hard inquiries on your credit score. Keep in mind that some online lenders will allow you to be prequalified with a soft credit check that will not affect your credit score. That’s an excellent way of viewing offers without commitment. Other aspects you should consider when researching the loan market include:
- The right lender
Assess the loan types the lender offers, eligibility criteria, same-day cash transfers, repayment terms, amount limits, and steps you’ll need to take if you experience financial trouble and you’re unable to repay the loan. Also, review their customer feedback and ensure you compare fees or any prepayment penalties for pay off the loan early.
- Type of loan
Knowing the type of loan you need affects your decision in terms of the loan amount, duration, interest rate, and repayment terms. Besides, while some might be flexible, some lenders approve applications if the money will be used for certain purposes, including:
- Auto loans
- Mortgage loans
- Student loans
- Medical loans
- Personal emergency loans
- Small business loans
- wedding loans
- vacation loans
- home improvement loans
Double-check your application
Once you’ve reviewed the suitable loan option and made your decision, it time to apply for the loan. Typically, an incomplete or incorrectly filled application will be delayed or rejected. So, ensure that you’ve prepared all the documentation you need for the application and double-check to make sure you’ve filled it correctly. The faster you provide the required information, the more streamlined your loan application process will be. Remember that lenders have different requirements, but typically, they’ll want you to fill out and provide the following information:
- Social security number
- Copy of your driver’s license
- List of other loans and debt obligations such as credit card debt and mortgage
- Proof of employment
- In some instances, proof of income, including past tax returns or pay stubs
The Takeaway
There’s no cast-on-stone deadline for your loan submission response as lenders have different application processes. But, you can employ the abovementioned tips to ensure the loan decisions are streamlined and receive your response quickly. Besides, the information can increase your chances of getting that loan approved at a more favorable interest rate.
