Dummy Guide For Acquiring Loan
Dealing with the lenders and your loan application
Securing Your Loan
Once you have decided to go for a specific loan according to your requirements such as home loan or business loan you have to fill up an application form provided by the lender you chose, be specific in that matter do your research and then select the lender. In the application you also have to provide the name of your spouse along with your own name if you are married that is, otherwise you are a ‘loaner’ actually a ‘loner’. The most important information you provide in the application form is your financial commitments and your income, the lender requires this information to analyze your eligibility for the loan and this is where it could get tough for some.
The lender makes contact with credit reference agencies in order to get a copy of your credit file to get a record of any court judgments against you for bankruptcy or debt-defaulting and by making use of credit scoring the lender determines the borrower category to which you belong which entirely depends on your situation. This procedure further determines the APR to be charged on you if you seem a higher risk to the lender then the charged APR will also be higher, the APR increases as the risk factor for the lender increases. After being satisfied with all the analysis the lender grants you the loan, the application procedure usually takes few hours if you are lucky or few days depending on the lender if the lender is not satisfied with the analysis, your loan application may be turned down, this sucks!
The internet nowadays has become a great platform to search for loans and borrowing money as many lenders are operating online providing you a wealth of opportunity to apply for a loan, the online procedure is much simpler and easier for you compared to the traditional lending procedures such as postal service, telephone or local office. Not to mention online lenders offer you a lower rate of APR due to less administrative costs involved. During the credit check any previous bad credit records of the borrower is revealed to the lender which could lead to the refusal of the new loan, people with bad credit records may find it difficult to secure loans, but people with no credit records may also find it difficult to get a loan as the lender is to be assured of your aptitude to repay the loan since there’s got to be a big catch for the mean lender too , so if you do not posses credit card or have a history of mortgages and loans then the lender would not be able to analyze your eligibility as the risk factor involved for the lender is much. Same remains the case for the people who are self-employed, or who travel frequently, or people who recently changed their job.
People who belong to any of these categories should not be too concerned so as to loose all hope as there are many lenders specifically targeting people who are involved in such situations and building their own loan market. By applying for loan to these lenders your chances of successfully securing the loan is much better, but as we know there’s always a catch, so in return such lender will charge you a much higher APR maybe double the rate of the cheapest available loan on the market. This is due to you being a higher risk for the lender, the high cost is considerable for you firstly if you are sure of yourself that you will make good use of the loan and be able to pull it off your head later, and secondly you will be building your payment history which is comparable to credit history, after addition of the records to your credit file you will be able to qualify for standard loan at a lower APR in the future. Another option for you if you are a property owner is to go for a secured loan rather than an unsecured loan, in the secured loan the lender has the security benefit as the lender can claim your property if you default on your repayments, due to this reason your loan application is more likely to be considered by the lender, but this option is risky for you is it not!
So be absolutely sure of yourself, plan for yourself and then go ahead and do not let the lender eat you up. Stay healthy and stay safe and by the way I wonder how’s WrestleMania going to be this year, the last one was trashy hmmm let’s see!