Searching for a loan and then getting approved for one can be a very difficult process. Some perks most people look for with a loan include a low-interest rate and affordable payments. Another perk that people look for is a short process that doesn’t require a copious amount of paperwork in order to apply for funding.
For all these reasons and more, it is important to do proper research to find the best loan offer and lender for your unique financial situation. Ideally, your lender should be transparent and honest with you, which means not surprising you with hidden fees or penalties.
This article will share some helpful tips on how you could get your loan approved quickly:
Have Your Documents Ready
One of the most important things you can do before applying for any type of loan is to get all the required paperwork ready. The documents you will be asked to provide will depend on the lender and the type of loan you apply for, but typically the following are requested:
You can also research online about the documents you will need to apply for a specific type of loan. Getting your documents ready in advance will help save a lot of time when it comes to getting approved for a loan.
Know Your Current FICO Score
Any and all loans require a credit check. A credit check is a deep dive into your financial history to learn about your repayment habits. A credit check will also let the lender see your current score, which is determined by five main categories:
However, not all lenders treat credit checks the same. For example, unsecured loans do not require collateral, and since there is no added security for the lender, credit is important for qualification. But secured loans require the use of an asset as collateral, so bad credit may not deter you from getting funded. Unsecured personal loans are hard to qualify for if you have low credit, but title loans require collateral, so approval rates are typically higher.
By knowing your current FICO score, you can better determine what types of rates and terms you are likely to get.
Do Not Apply for Numerous Loans
Applying for a loan requires a hard credit check, which can lower your credit by a few points. If you apply for numerous loans at the same time, you can lower your credit significantly.
First, determine what type of loan you want and which lender you want to work with before applying. When comparing lenders and inquiring, ask whether they require a soft or hard credit check. A soft credit check will not affect your score, while a hard credit check will.
By avoiding numerous inquiries for a loan, a credit check by the lender you actually wish to work with will go over a lot better.
Know What You Want Your Loan Terms to Look Like
Sometimes a loan process can be lengthened by a borrower who does not know what they want. Before you apply for a loan, figure out a few details first, such as:
All these details could help you quickly decide what type of loan you want and help the lender quickly draw up a loan agreement for you.
When looking to get approved for a loan, keep these details in mind so you can know what to expect and to speed up the process.