We all have dreams and sometimes in order for these dreams to materialize we need a huge amount of cash. If your savings are not enough to support your dream and turning it into a reality, don’t fret because you can always apply for a bank loan.
There are various reasons why people apply for a bank loan it could be they want to purchase a new car or prepare for a wedding whatever the reason there are several steps that you need to complete before the bank will grant your request. After all, we’re talking about hundreds, thousands possibly millions of dollars here. It’s not an amount any bank would just willfully give away. So, how do you apply for a bank loan and what are the steps you need to take to ensure that it gets approved? Let’s find out.
We will break it down into 7 steps. The first step is coming up with a decision and identifying what you need, the second step is looking for an appropriate loan, the third step is to check out what lenders are offering, the fourth step is knowing the requirements and APR, the fifth step is comparing the offers of lenders, the six step is to compiling all of the needed documents and last but not least the seventh step is the submission of your application letter.
First Step: Come Up with A Decision
Before you start looking for a loan you must first know what exactly you need and evaluate your existing financial status. For example, let’s say you are planning to buy a car. Assuming that you have a good credit rating it might be better for you to apply for a personal loan as this has a lower APR or annual percentage rate. Unfortunately, if you have a bad credit record you may have to find a consigner to qualify for a loan.
It is also important that you identify how much money you will need and how long it will take to repay the money you borrowed and what you can possibly afford. You should also note any features available from your loan like what if you can pay off your debt early.
Second Step: Look for An Appropriate Loan
Are you aware that there are different types of loans available? There are unsecured personal loans, fixed rate loans, secured loans and variable rate loans. There are also loans for bad credit such as installment loans, auto title loans and payday loans. As soon as you have decided on the type of features you want from your loan your next step is to study and take a look at the different types of loans so you can decide which one you are going to get. Make sure that you choose a loan that is appropriate to your needs.
It’s also wise to compare the maximum limit offered by lenders to ensure that you get the right amount for what you will be spending for.
Third Step: Check Out What Lenders Are Offering
It is important to mention that not all loans have the same offer. Like there are banks that offer personal loans but are only exclusive to applicants with good credit scores. Similarly, there are lenders who only offer products to applicants with bad credit scores like installment loans and payday loans.
Fourth Step: Know the Requirements and Annual Percentage Rate
Out of all the steps in applying for a bank loan this is by far the most important of all. The last thing you’d want is to spend all your time and energy completing your application only to find out in the end that you are not eligible. Most if not all lenders will provide you with a list of requirements so that applicants will not if they qualify or not. These requirements must be met before you apply for a loan. Therefore, it is vital that you complete these requirements before applying. Lenders will also provide you with the corresponding Annual Percentage Rate.
For bad credit loans like installment or payday loans, usually the Annual Percentage Rate is fixed for all applicants. However, there are also lenders that will provide you with an APR estimate without altering your credit score. This is why it is necessary that you know what your existing credit score is so you can have an idea what APR you are qualified for.
Fifth Step: Compare Lender Offers
Again, it is important that you go back to step one and decide what you want so you can come up with a decision and compare your options to make sure you are getting the most appropriate loan for you. Determine the charging fees and learn the differences for each type of loan that you are qualified for. It’s also important to identify the features offered by the different types of loans.
Sixth Step: Compile All Documents Needed for Your Bank Loan Application
The requirements will be based on what the lender will request and the type of loan you want to get. Majority of bank loans will require documents that will validate your personal identity, show a proof of your income and your finances, verify where you live and information about your job.
Seventh Step: Submission of Your Bank Loan Application
After you have successfully completed steps one to six you are now ready to apply for a loan and all you need to do is to submit your bank loan application. You can submit it manually or submit it via the Internet.
There you have it, the process of applying for a bank loan. Good luck!
