Getting Approved for a Personal Loan Quickly: Five Steps to Take

By: Isabella N., Assistancefinder
Published Jan 27, 2020 8:20:46 AM

Getting approved for a personal loan isn’t always the easiest thing to accomplish, especially if you have poor credit or a low income. Ever since the housing boom and subsequent crisis, lenders are much more cautious about who they approve. It used to be much easier to get approved for mortgages or personal loans, and often times, income documentation wasn’t even required. Those days are over, but that’s a good thing. You don’t want a lender to approve you for a loan you can’t afford to pay back.

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That said, it’s also important that you have access to the loan you need. Whether you’re buying a boat or taking a year-long sabbatical to publish a book, you have your reasons for wanting a personal loan. You have a solid financial plan in place, and you’re confident about your ability to make payments on time. Now, all you need is to find a lender and get the application process started.

1. Look Everything Over

Your credit score is one of the most important indicators lenders use to determine how much money you can borrow and at what interest rate. If you haven’t checked your credit report in a while, now is the time. Going over your records and making sure everything is accurate a few weeks to a few months before you plan to apply for your loan will help you avoid any delays due to false information on the report.

2. Be Realistic

It’s important to be realistic when it comes to expectations about your loan. If your credit score is lower than 640, getting approved for a personal loan is very unlikely. There’s a reason companies offer title loans to people with poor credit, and it’s that those people often can’t get any other type of loan. If you want to get a personal loan, and your credit is poor, it might be best to actively work to improve your score for a while before applying. Your score generally needs to be at least 700 if you want to get approved by a major bank.

3. Do Your Research

There are certainly lenders who work with people with poor credit, but it’s important to do your research so you figure out what you’re getting into. This is true if you have excellent credit too.

You know how much money you need, but have you done any research into the actual loan? Have you checked to see what’s available? Before you can move ahead with your loan, it helps to read all the fine print involved with various offers and get a solid grasp on your options.

The ability to do research online will save you a lot of time and hassle. Decades ago, you would have had to call or visit a number of physical locations and speak to representatives to determine your loan options. Since online lenders typically have less overhead costs, they’re sometimes able to offer lower rates.

There are sadly plenty of untrustworthy companies out there, many of which are offering scam loans to people in vulnerable situations. Checking to see whether the lender is a state-licensed financial institution can help avoid getting involved in something that will cause a major headache later. If something shady has happened with the lender in the past, someone will have likely already reported it there.

4. Make Inquiries

It’s okay to ask your lender plenty of questions. In fact, it’s wise to specifically inquire about the requirements for the loan so you don’t waste your time applying if you don’t stand a chance. Be honest about your credit information and financial situation so you can get the best feedback possible about how you should proceed with your application. For example, if your credit score is a little too low as of now, you might be able to fix that by improving your credit over the next year and holding off on your loan until then. Plans can’t always be changed, but you won’t be able to make wise decisions about what you want to do without all the information, and if you don’t ask, you might delay the process even more by filling out an application that will later be denied.

5. Get Organized

Once you’ve spoken to your lender and made inquiries about the requirements, you can make a checklist to ensure you have all the important documentation you need before beginning the application process.
Some loans are approved right away, but even if you’re prepared and organized, the process can still sometimes take a few weeks. For that reason, it’s always wise to begin taking the necessary steps to get your loan well in advance of when you’ll actually need the money.

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