Increase your chances for loan approval by following these 9 steps
How to Get Approved For A Loan?
We grow up imagining what life would be like when we were older. Well, now that we’re here, there’s probably one sure thing we can agree upon: it’s unpredictable. Whether it’s something good to celebrate or a challenge to worry about, life brings surprise after surprise and sometimes adults feel like taking a breather.
As you try to manage adulting, you will definitely encounter a popping expense every once in a while. It might be some bills piling up, medical expenses, house or car repairs, or other emergency needs. All of these shockers can be described the same way: a need for extra cash. So, what do you do when you are in need of some extra blue bills?
Here’s when applying for a loan comes in. But how do you apply for a loan? And more importantly, how can you get approved for a loan? Don’t worry, we’ll help you. First, take a look at these tips that will help boost your chances to get your coveted loan approval.
- Research and understand different loan types
Before trying to get a loan from a bank or a lending platform, make sure to take time to do some reading online about the differences in loan offerings from each provider. You can note and study each individual offering and verify the one that is most suited and beneficial for your needs.
Also, consider the type of loan you will be applying for. A house loan, a personal loan, a car loan, or a small business or franchise loan come with their own individual requirements and terms. Then, before going further, read the fine print to ensure your safety and security and so you will not be surprised with the financials.
- Ask questions
Once you have decided on the lending institution and the loan type you want to try out for, it’s time to talk to them and ask anything you have in mind. For traditional institutions like banks, you would most likely have to go out and visit a branch to discuss the ins and outs of their lending program.
However, if you go for a platform like Blend.ph, there would be no need to go out as you can reach out to the team through email and our social media platforms. From inquiries to the actual application process, there would be no need to go out of the house as Blend.ph functions fully online!
- Understand your limits and financial capacity
One reason why people do not get approved for loans is because they overestimate their limits and allowable credit amount. First of all, you should know at the start the realistic loan principal amount that will be manageable for you. Decide on a number by looking at how much you earn monthly, your assets, liabilities, and how much you can allot for your monthly payments. Don’t apply for a one million peso loan when you know that you cannot cash out monthly repayments for the term, especially with interest on top of it.
When you go overboard with what is allowable for you, there is a tendency that you might get a lower amount from the lender, or your request will be outright declined.
4. Clean up your credit history
All lending platforms and financial institutions look at your credit history. This report is very powerful as it has the power to represent your spending and repayment behaviors. To get loan approval, you should ensure that there are no red flags in your credit history. Late payments, bouncing checks, credit card delinquencies, and other similar things will definitely harm your chances of approval.
On the other hand, if you have nearly non-existent credit history, owning a credit card and maintaining your payments well can establish you and your responsible paying behavior. A credit card is also a starting measurement of identification in terms of the ratio of debt to your income.
5. Have a well-maintained savings account
Aside from a credit card, you should also ensure that you have a savings account before trying out for a loan. Having a regular contribution to a bank account like this one will show the lenders that you can manage to meet the amount that they will set for loan repayments.
Why do you have to do this? Lenders may be okay with letting you borrow their money, but they approach with caution, too. A healthy savings account can give you additional brownie points on your way to win their hearts.
6. Promptly prepare all the necessary documents
Aside from that, a loan application process calls for verification of your identity. So, to start with, make sure that you are ready with valid IDs, especially government-issued ones. Also be prepared with your financial documents like Certification of Employment, Payslips, Proof of Billing, Income Tax Returns, and other similar files.
7. Only provide real and accurate information
What can make or break your loan application is your integrity and honesty. When you start your loan application, the lending platform does not blindly accept all the information that you provide. There is an extensive verification process that requires phone calls and actual visits to really identify whether all that you claim is true. Any inconsistencies at this part of the process will lead to a denied application.
Be very responsive to your lender
You might think that the application process ends once you click on submit. You are somewhat right – but, it is very crucial to keep your communication lines open and prepare for the possibility of getting a verification phone call. If you fail to respond right away, you’ll just be adding extra processing days to your loan – or worse, being tagged as declined due to the inability to supply everything the lender needs to know.
9. Be patient
When doing loan applications, make sure that you practice the art of patience and do not apply for 10 or more financial institutions at once. Do you think you’ll be able repayment of 10 similar loans with interest on top? Plus, each loan application will be reflected on your credit report, and too many applications will make the institutions shake their heads and deny your request. Too many requests increase your high risk level, which will lead to an unfavorable response.
For your lending needs, go with Blend.ph. We are an online Peer-to-Peer Lending Platform that you can trust to help you get those extra bundles of cash to settle your emergency expenses or help you go closer to the fulfillment of your dreams. We offer a good selection of loan types with very competitive interest rates to meet different types of needs.