Thinking about taking out a personal loan? If you have a perfect credit history, you likely have nothing to worry about. But if there have been some bumps along the road when it comes to your financial history, you might end up with a higher personal loan rate than you bargained for, not to mention the chance of getting outright rejected. If you want to improve the chances of success on your personal loan application, here are some tips that might help.
1. Run a Credit Check Yourself and Check for Errors
The last thing you want to happen is get denied for a loan because of information that isn't even true. You can keep this from happening by pulling your own credit report and going over it line by line. If you notice any errors, get them fixed before applying for a new loan. The point is that you don't want the person looking to approve you for a loan to be the one to discover the error.
2. Be Specific About Your Intentions
While it might be possible to get a personal loan without stating any particular reason why you need the money, most lenders will want to see that you have specific plans for the funds. It can help your chances of approval if the money will actually go towards something useful like a home improvement or a car repair, so you can keep going to work and earning a paycheck. It would be even better if the loan you take out could be used towards some kind of side hustle that will bring in extra income. But regardless of the reason for the loan, try and be specific, open, and clear about where the money is going and why.
3. Make a List of Possible Collateral
Some lenders may be willing to give you a better personal loan rate if you have collateral you can put up to back the loan in the event of a default. For example, some lenders might be willing to offer collateral value for your old jewelry that you never wear anymore or other such valuables. Just make sure you don't put up anything that you would be devastated to lose, like your only car.
Before applying for a personal loan, make sure your credit report is free of mistakes, and that you can clearly communicate a specific reason for the loan. For more tips, reach out to a company like US Community Credit Union and ask them what criteria they use for approval today.