If you’re short on cash and you don’t have access to a credit card, you might not have many places to turn for financial help. A good personal loan can be very useful, but these loans are not guaranteed. Unfortunately, getting denied for a personal loan doesn’t just stop you from getting the money you need, but it can actually further damage your credit score in a way that makes it difficult for you to get loans in the future. If you want to avoid getting denied for a personal loan, you should make sure that you follow the five tips below.
Do Your Research
The best place to start is with research. Take some time to look at the lender from whom you are trying to get a loan and think about whether or not they are likely to approve your loan. While most lenders aren’t all that clear about the exact scores or financial situations with which they are willing to work, there are plenty of websites like kreditus.eu that can give you fairly accurate ranges on which you can base your decision.
Once you know who the lender is likely to work with, you can determine if you fit the same profile and if you’re likely to get your request approved.
Check Your Credit Score
Your next step is to look at your own credit score. Now that you know the scores from which lenders look, you can figure out where you stand. Your credit score may not be the only factor in the lender’s decision, but it will play a role both in whether they are willing to look at your application and the interest rate that you end up paying.
When you look at your score, take a few minutes to look at the component parts – if you have any accounts that are marked as late or unpaid, for example, you’ll be more likely to have your loan denied.
Talk to the Originator
Your next step is to talk directly to a loan originator. It’s vital that you do this before you file your paperwork – doing so will almost always lead to a credit check, which will generally either lead to getting approved or denied for the loan.
Instead, talk to someone in the loan origination department and ask them for a profile of the average person to whom they lend money. If you feel like you fit that profile, go ahead and request the paperwork. While the originator may still try to sell you on a loan product, make sure to walk away if you think that you are going to get denied.
Apply for the Right Loan
It’s also very important that you apply for the right loan from a loan originator. Take a look at all of the products that are available and research exactly to whom they are marketed. It’s also a very good idea to make sure that you don’t apply for a loan amount that’s outside of your theoretical ability to replay – you’ll often have a much easier time getting approved for a loan that’s got a lower principle amount.
Gather All Your Documents
Your final step is to gather all of your documents. You will almost certainly need the following:
- Identification documents
- Proof of employment/income
- Proof of residency
- A blank check or checking account information
If you cannot provide all of this information, most loan companies will reject your application outright. Even those that work with people who have poor credit scores still want to be able to process your paperwork, and if they don’t have the right information they won’t be able to determine if they can give you a loan. Make sure you have everything together when you apply so that you don’t get denied.
Figuring out how to get approved for a personal loan usually means doing research, understanding what loans you can realistically get, and providing the lender with the right paperwork. If you can follow the rules, you’ll stand a much better chance of getting your loan approved and getting the money you need.