Last Updated on February 26, 2024 by Nasir Hanif
Picture: Towfiqu Barbhuiya / Unsplash
Whether you need a loan for a house, a car, or an unexpected cost, you can’t help but feel a little stressed by the prospect of having to navigate your way through piles of paperwork. Loans have traditionally been time-consuming and complicated to obtain, even for small sums of money.
However, that doesn’t have to be your experience. You might find the entire loan application process straightforward and stress-free by taking the following advice:
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Get All Your Documents in Order First
Most loan providers require a great deal of information to ensure your trustworthiness for a loan. Even before applying, start gathering all the documents you’ll need to prevent to-ing and fro-ing with your chosen loan provider.
Approach your regular registered tax accountant for employer and income verification, and scan copies of your driver’s license, state-issued ID, and passport as proof of identity. You’ll also likely need proof of your address, bank statements, and outgoings to ensure loan serviceability.
By having these in order before you apply for a loan, you might enjoy a faster and more straightforward loan application process.
Repair Your Credit Score
Poor credit can throw a spanner in the works when you’re trying to obtain a loan through a traditional lender. The lower your credit score, the less trustworthy you can appear in the eyes of a lender. As a result, fixing your credit can be worthwhile before applying for a loan.
Correct or dispute any errors, start paying your bills on time, and ensure your credit utilization rate is below 30%. If you have other debts, consider paying these down before obtaining another loan. Improving your credit score can take time, but it can be worth it if it means you’re eligible for more competitive lending.
Read the Fine Print
Reading the fine print provided by a lender may save you from much unnecessary stress. If you’re well-informed about what you’re agreeing to, you might find it much easier to provide what a lender needs and enjoy a straightforward and stress-free repayment process.
Reading all loan documentation can also be crucial for understanding loan interest rates and general repayment terms. The goal is to be as well-informed as possible before signing any contracts.
Explore Online Borrowing
Gone are the days when all borrowing needed to happen in person. Now, many lenders offer 100% online lending. Rather than driving to a loan office, you can submit an application from the comfort of your home and receive an answer about your application in a matter of days or even hours.
Obtaining loans through traditional banks can also be far easier than before. You can generally communicate with lenders via email and send all necessary documentation through one platform for convenience and speed.
Choose the Right Loan Type
There are many different loan types to choose from, such as home, personal, student, auto, business, and debt consolidation. As these loans serve different purposes, they can have vastly different criteria you must meet.
Consider what you’ll use your money for and research the most suitable borrowing options. A small amount of research may prevent you from applying for a loan that doesn’t end up having satisfactory criteria for your needs or has a higher interest rate than you expected.
Not everyone enjoys a smooth and stress-free loan application process, but that doesn’t mean you won’t. Choose the right loan type, get your documentation in order, and read through the fine print carefully. These actions might see you with the money you requested in no time!
Consider Alternative Lending Options
Traditional banks aren’t the only game in town when it comes to borrowing money. Exploring alternative lending options, such as peer-to-peer lending platforms or credit unions, can provide competitive rates and more flexible terms than conventional banks. These alternative lenders often have streamlined application processes and may be more willing to work with individuals who have less-than-perfect credit histories. By broadening your search beyond traditional financial institutions, you may find a lending solution that better fits your needs and preferences.