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August 10, 2017

How to Apply for a Loan

There is no worse feeling than needing money. You might need it for medical reasons, to pay bills, or you’ve seen something you’ve just got to buy. One way to get the desired funds is to apply for a loan. Here are the steps to give you a better chance of getting approved.

Types of Loans

Before you get too wrapped-up in meeting specific criteria, it’s important to research the different types of loans on offer. By doing this, you will reduce your workload and may find one better than you anticipated.

Types of loans include: Student Loan, Personal Loan, Payday Loan, and Consolidated Loan, to name a few. Most loans are with banks, so enquire at your banking establishment.

Preparation

There are a handful of things you need to know and do before applying for a loan. Meeting these criteria will not guarantee a successful application, but are a good place to start.

Firstly, you must be of-age to be considered - at least 18 years old. This can change depending on your locality.

You must be an American citizen or resident. This includes its territories.

Ensure you have a job and are receiving a regular income that meets a minimum requirement.

A good credit rating and no current bankruptcy proceedings will also be necessary.

Choose the Amount

If you have financial woes, the last thing you want to do is make more problems for yourself. Have a look at your finances, use a debt calculator, and apply for the right amount. The money from a loan is meant for short-term use only, not for long-term large-scale debts. Ensure you will have enough from your income to meet the payments.

Where to Apply

There are many establishments that offer loans, so finding the right one could be daunting. Talk to your friends and family, research them online, and ask questions. Banks will be your safest option, however a quick search online will supply you with many alternatives.

Apply

The majority of loan applications do not take long, and can be done over the internet. You will typically be told the outcome of your application in minutes, however there are some that take longer. It will depend on the amount requested and your documents. You generally have a few days to sign-off on the loan agreement, or else you will be denied and have to wait until you can apply again.

Denied

So, what happens if your application for a loan is denied? Go back through your application and see where you can improve. Perhaps ask for a raise at your job, or take on more hours to ensure a higher paycheque. Ask what you can do to improve your credit rating. Consider lowering the amount you are asking for.

No two loan applications are the same. Each establishment will have detailed steps to follow - either through their website or detailed on their website. Good luck!

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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Item Reviewed: How to Apply for a Loan Rating: 5 Reviewed By: Econ Matters