How to Obtain a Personal Loan Successfully
- 1). Get a credit report. Visit AnnualCreditReport.com and request a free copy of your credit report to know your financial standing. Lenders use credit reports and income to determine creditworthiness.
- 2). Make necessary improvements to your credit report. High debts, late payments and collection accounts can result in a loan denial. After evaluating your report, take steps to improve your rating before applying for a personal loan. Pay down debts, pay off accounts and submit on-time payments.
- 3). Gather all necessary documents. Steady income is required for personal loans, so you'll need such documentation as paycheck stubs, bank statements and W-2 forms.
- 4). Submit a loan application with your personal bank. Since you've already established a working relationship with the institution, it may be more inclined to lend you money.
- 5). Choose property to secure the loan. Banks rarely offer unsecured personal loans. Use a vehicle title or other valuable personal property to act as collateral or security for the loan.
- 6). Use a co-signer, if needed. Credit score minimums for a personal loan vary. If your lender requests a co-signer, choose someone with good credit and stable financial history.
- 7). Understand the loan terms. Fully comprehend the loan agreement before signing on the dotted line. Know the interest rate, monthly terms and monthly payments. Don't be afraid to ask questions; if you're not in complete agreement with the terms, walk away.
