Plan Everything Out
If you’re going to get a loan, it’s generally not going to be a proposition so easy as walking into a bank, nodding to a teller, and getting your money. There are many factors lending institutions must take into account when providing loans. For the bank, there must be a means of securing profit.
When you get a loan, those providing it are literally investing in you. Interest in payback is profit. Multiple loans to multiple individuals residually produce income. This is very important to any financial institution. If you’re going to get what you need from such institutions, you’ve got to know how the bank sees you, and plan your financial profile such that it conforms to their expectations.
Several factors in loan approval include:
- Credit score
- Whether or not you have a checking account
- Occupational stability
Credit scores can be difficult if you have a lot of debt. Additionally, if you once had good credit, but leave it be through not investing in any regularly recurring services requiring payment, your credit score will gradually decline. You need to have utilities, smartphone bills, internet bills, cable, a car payment, or a mortgage—something of this quality needs to be constantly drawing regular payment from you. This increases your credit score.
From there, provided you’ve got regular income from a strong occupation and a checking account, you’re well-poised for the loan you desire. The final consideration is expenses. If you’ve got too many recurring expenses, alimony, student loan debt, credit card debt, legal debt, medical debt, or anything of that kind, securing a loan may be more difficult, or you may have to pay more interest in order for the bank to make their back.
Ideally, you need to get your debt taken care of before adding to it with an additional loan. As you begin getting debt taken care of, segue into some small residual expense that builds credit. Taking out a small loan and paying it back quickly will help your credit. If you can afford the interest, this in itself can be a good strategy to help round out your financial profile.
Widening Variety Of Loans
Another good strategy is widening the sort of loans you have available to you by working with an organization who provides financial lending services to a broad array of clientele. Securing loans from loanable opens you up to a wide variety of financial solutions that have been designed to meet the largest viable cross-section of people sustainably possible for their business model.
Such organizations can be ideal in helping you find something that will fit. In some scenarios, you’ll be well-met to take out a large long-term loan. In others, your best bet may be to start small and expand from “strength to strength”, as the saying goes in business.
Consolidation And Budget Tightening
If as yet you’re not quite set up to follow these briefly outlined guidelines, a starting place may be crowdfunding; though you might need to do something a bit more extreme like selling a mortgage; or better yet: consolidation of debt. Credit card, car, home, school, medical, and other expenses will come bundled with their own interest rates.
What’s more expensive: paying between 1% and 3% interest on five or more debts, or paying 5% on one? Well, the latter. Here’s what loan consolidation groups do: they buy your debt. They pay off your creditors, and now you only pay them, and at a single rate with interest that is cumulatively less than what you would have paid to the individual creditors.
Those who previously invested in you get their money back, and your new creditor saves you money while making interest; so everybody wins. All these things being said, whatever you do, you want to pay those debts off fast. You are literally enslaved to them until they are gone—this is largely where the term “wage slave” comes from.
So cut out the expensive coffees, reduce driving to save on gas, prepare meals at home, quit going out on the town all the time, and altogether tighten your budget. Such an approach will help you overcome debt, and poise you to be an ideal candidate for a necessary loan when you need it.