Apply for a Personal Loan

The first step to borrowing money is to apply for a personal loan. It doesn’t matter if you’re using your local bank, an online lending company or a payday advance service. They all must collect information from you about your needs and obtain your agreement to pull your credit, if they use credit scores. Being unprepared to submit the application doesn’t necessarily destroy your approval chances, but it can take more time.

When you apply for personal loan products, the lending institution is taking a risk that you’ll repay the debt. In a sense, they have a stake in your financial well-being, so they will delve into any aspect of your financial life they deem relevant. Some of the questions can seem invasive or unrelated, but failure to answer honestly can lead to a decline. Make sure to take certain pieces of information when you apply.

Take: Beyond having previous addresses and basic information ready, have a clear purpose for the funds in mind. Your lender already knows you need money or you wouldn’t be applying for a personal loan. Be able to explain where the money’s going to expedite the underwriting process.

Reason: Lenders must know the purpose of your loan because lending money to finance terror activities or illegal endeavors leads to fines and potential closure by the United States Government. Unless the bank has specific lending policies against using certain kinds of loans for a particular purpose, it only matters that they can verify your intended use of funds is not illegal or illicit.

Take: Having a list of personal and business references with you isn’t a bad idea. Not all lenders require references, but taking a list of people ready to vouch for your trustworthiness never hurts. Just make sure you ask before adding anyone to the list. Finding out a friend or colleague doubts your reliability when you apply for a personal loan is detrimental to your approval chances.

Reason: If you apply for personal loans not requiring high credit scores, the lender takes more of a risk in giving you the money. Some lenders recognize your likeliness to repay the loan has more to do with character and stability than the number on your credit report. Talking to people who can verify you fulfill your obligations establishes your character, while talking to those who affirm you have the job you claim to have proves capacity to repay.

When you have any doubt about what the lender requires to apply for a personal loan, find out what you need to bring when you schedule the appointment. Fewer surprises at the time of application often lead to fewer delays in getting the money you need.

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