Securing a Personal Loan

As a loan officer I have seen it all, from people with no credit trying to borrow thousands of dollars blindly, to people whose credit looks like a tree at Christmas time (lit up with so much much red from deliquency it’s astonishing!). In securing the best personal loan for you it is important that you do research beforehand to keep you from either getting a loan you will be sorry for later on or not getting a loan at all and damaging your credit from the application process. In this article I will give you tips and help you get ready for the application process.

Tip #1- Review your credit before applying for a loan

You would not believe the amount of people I service and take applications on for personal loans who do not know whats on their credit report. As a consumer it is vital that you know what is contained in all three of your reports from the “Big Three”, that is Equifax, Transunion, and Experian. The government has even setup a website that consumers can go to and pull a copy of their credit report for free once a year. The website address is, this site is free you do not, I repeat do not have to pay for any membership to a credit monitoring service to pull your reports. While this site is free if you need an updated version of your report after you pull it from this site you will need to go to each site and pay for an updated version of your credit report.

Tip #2- Have all information ready before you apply

When applying for a loan you will be asked very personal questions as it relates to the loan. At the very minimum you are asked for your name, date of birth, social security number. Applicants are also asked for the purpose of the loan which can make them upset, remember you are the one who needs the money not the loan company, it is their job to determine if the loan will be made at based upon the answers you give, answer all questions completely. Make sure you have all residence addresses for the past three years, employers for the past three years, income and mortgage information and balances, references.

Tip #3- Be honest

This I can not stress enough when applying for a loan, tell the truth. Do not embellish on your income, it will be verified,do not give a bogus telephone number or address for a reference depending on the company they maybe called before you are approved for the loan. If you owe child support or have other obligations in that arena you will be asked and it should be disclosed then, alot of people do not know that more and more states are placing child support obligations on credit reports and showing it as an open obligation.

Tip #4- Ask questions

Questioning is a two way street, the loan company has every right to ask you questions to determine if the loan will be made, as a consumer you have every right to ask questions before you allow an application to be taken. Do not let someone take a loan application on you without your permission and definitely ask upfront about the types of products and services the company offers, interest rates, and loan terms fees. If the loan officer you are talking to seems annoyes by the questions you are asking or in a rush to take an application on you before all your questions are answered to your satisfaction, steer clear of them. As loan officers we make a commission on the amount of loans we do each month, every customer has the right to be treated as curteously and respectfully before, during, and after the application process if that doesnt happen they frankly do not deserve your business.

Tip #5- Prepare for rejection

Inevitably after answering all the questions and a review of your credit, you are likely to hear no. No with one company does not mean no with another, but as a consumer you must be realistic if after two applications you receive two rejections it maybe time to regroup and rething your options. I believe you should allow for a maximum of three applications for personal loans, if you allow your credit to be pulled more than that you will cause your credit score to be pulled down and future creditors may become suspicious of multiple applications and assume you are desperate for credit, you never want to appear desperate. After your first rejection ask the loan officer if he or she can give you any clear cut indications as to why you were denied, some may be nice enough to tell you others may give you the company line “You should receive a letter in the mail detailing our reason for rejection.” Do not be afraid to ask if their is a company they can refer you to that may be able to help you get a loan, loan companies often refer customers to other companies they feel may be better suited to help their needs. Lastly, prepare for the possibility of a creditworthy co-signer, some one willing to sign on the loan with you to make the odds of it being approved even stronger.

While these tips are not the end all be all in securing the best personal loan for you it is a start.In Part II of my article on this subject I will go over industry terms and practices that are a must know and how they affect your chances of securing a personal loan.