Getting a Bank to Lend You Money
Getting a loan is a process that requires an individual to pay attention to detail. Without paying proper attention to details and ensuring the proper documentation is available, a bank will not approve any loan. Banks require several pieces of information before they will calculate whether or not a loan will be approved.
How to Get Your Bank to Lend You Money
Banks wants to ensure they will receive their money back. If you want to know why a bank may not lend you money, then it is likely that you are not doing the following things.
First, attempt to apply for a loan at a bank where you already have a checking and/or savings account. This bank knows that you are able to handle these accounts and may be willing to approve a small loan rather quickly. Larger loans are going to require meeting with a loan officer or personal banker. Schedule this meeting when you have enough time to devote your full attention. Bring along copies of your pay stubs as well as personal identification. The Patriot Act requires banks to verify who you are.
After the bank has seen your personal identification and verified your pay stubs they will pull a copy of your credit report. Your credit report is one of the most important pieces of information on you. The bank may have a certain threshold that your credit score has to be above in order to be granted a loan.
Additionally, they will look to see if all payments were made on time and in full. Should any payments have been made late or are currently behind they may ask the reason why. Banks also are going to calculate your debt ratio. This is how much income or assets you have over the amount of debt that is currently outstanding.
Income and Assets / Debt
Having a large amount of debt is a red flag to the bank as you may be unable to repay it. When applying for a loan, attempt to pay down any outstanding balances that are over 30% of your credit limit. If you are looking for banks that will lend to those with bad credit but have collateral, then learn more about proving your collateral to banks.
Having a cosigner, with a good credit history, to back up your bank loan will also help lock in those lower interest rates even if you have bad credit. When a cosigner of a loan puts their signature on the loan contract, they agree to repay the loan if you ever default. Trusted friends or family members, who are unable to lend you money but have a good credit history, are the best candidates as cosigners.
When meeting with a loan officer or other bank official try to act professionally. This includes wearing clothes that you would wear to a wedding or other formal event, taking a shower before the meeting and arriving on time. Bankers are not allowed to use these as formal criteria for approving a loan but the effort will show them that you are a responsible individual who wants to make a good impression.
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