When it comes to applying for a loan, the amount of paperwork you have to complete and hoops you have to jump through largely depend on what type of loan it is. Is it a business or a personal loan? If it’s a personal loan, is it going to be a short-term or debt consolidation loan? Is it for a larger purchase such as a new vehicle or even a home mortgage? These questions are all important when knowing what you should be prepared to do when you go to apply for loans. Home mortgages or major business real estate purchases are going to require even more legal and financial paperwork than smaller basic loans, but the following tips are you should follow to apply for all loans.
Do Your Research On Loan Providers
While brick and mortar banks and credit unions are still the most common lenders, online lenders and alternative agencies have sprung up in greater numbers recently and have sometimes proved to be better than traditional lenders. One reason online lenders have been more popular is they’ve accepted borrowers who don’t have good credit, and in some cases their interest rates are lower with online lenders. Online lenders also often approve loan applications much faster than brick and mortar banks. But be careful to do your homework on any company you plan to take a loan from and make sure to avoid lenders with very high interest rates.
Know Your Credit Report And Score
A big part of being approved for a loan is having your credit report in order and making sure your credit score is also good. You can get a copy of your credit report free every year by going to www.annualcreditreport.com. You should make sure all your credit reports are free of errors and discrepancies because these can affect your overall credit score and could make the difference in the loan amount you’re granted as well as interest rates. If you aren’t approved for a loan you should learn how to improve spending habits to get your credit back up.
Have Your Financial Statements In Order
To apply for any kind of loan, you’ll want to be able to prove you have a solid paycheck or are generating good business revenue and can make your payments. You should gather up current W2s and paystubs, current bank and credit card statements, filled out tax forms and other financial record documents. You’ll need to fill out paperwork explaining what you plan to use the loan for and what kind of returns you should expect.