There is no guarantee that you will ever get approved for a personal loan, but there are some things that can improve your chances. At the very least, there are things that will help you qualify to fill out an application. What are they?
An Active Bank Account
Loan providers aren’t going to give you a loan in the form of cash. It’s going to be made through a digital transfer directly into your bank account. So, an active bank account is essential for anyone who is hoping to apply for a loan in the near future.
If you don’t have an active bank account, you’ll need to make that your primary goal before thinking about borrowing any funds. Research different banks to see which account options interest you. You may prefer online-only banks to big-name banks because they often have low minimum deposits for opening new accounts. Some will have no minimum deposits whatsoever.
Once you’ve selected the bank you’re interested in, you’ll need the following to open up an account:
- Your Social Security Number
- A government-issued ID (for example, a driver’s license)
- Initial deposit amount (if required)
After you’ve gathered these, you can fill out an application and, hopefully, get to open up an account. You will have to use the account regularly for it to be considered active. If you don’t use it to make transactions for over a year, it will be considered “inactive.” If you don’t use it for 2 years, it’s considered dormant.
A Steady Stream of Income
Another common qualification for personal loans is a steady stream of income. A loan provider wants to be confident that you can make regular loan repayments in full and on time. Without a steady stream of income, you might struggle to follow a repayment plan. You’re more likely to default on the bills and stretch out the repayment process. It’s considered a lending risk.
To prove that you have a steady stream of income, you may have to reveal bank statements showing that you have received payments in the past month or two.
A Good Credit Score
Your consumer credit score is a calculation that reveals your recent credit behavior to financial institutions. A high score tends to mean that you’ve consistently paid your bills, kept your credit utilization low and maintained credit accounts responsibly. A low score tends to mean that you’ve done the opposite. In the most extreme cases, low scores mean that users have maxed out credit accounts, gone into debt collection or declared personal bankruptcy.
Your consumer credit score lets loan providers know whether you’re a lending risk or not. If you have a good score, you might have a better chance of getting approved.
A Strong Internet Connection
You don’t need to travel to your neighborhood bank branch to apply for a loan. You can do it from the comfort of your own home, as long as you have access to a strong internet connection. Find out what are online loans to learn about this convenient borrowing option. It could save you from making an unnecessary trip to a bank.
Whenever applying for a loan online, use a secure connection. Your private home network is great, as long as it’s password protected. Do not use a public WiFi connection to apply for online loans — or do any sensitive financial activity — because hackers can breach insecure connections and access your data. If you ever need to take these financial steps away from home, you may want to use a virtual private network as a safety measure.
These are just four things that could make it easier for you to get a loan. Do you have them all?