5 Tips for Obtaining the Best Loan Possible

by on August 23rd, 2010
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From time to time, we all need a loan. It may be a car that broke down or you may want to purchase a new car. Either way, getting the right loan is essential. Thankfully, there are some tips you can use to ensure you get the best loan possible. Whether it’s sprucing up your credit report or knowing how to best present yourself, obtaining the best loan is much easier when you follow these tips.

Check Your Credit Report and Fix Mistakes

You never want to walk into a loan office unprepared. This means you need to know where you stand with the major credit bureaus. This information can be obtained once a year, for free, simply by contacting the companies. Once you receive your credit reports, you need to look over each bit of information to make sure it’s all correct. One mistake could cost you a low interest rate.

Boost Your Credit Score

Another bit of information that you will have to pay for is your credit score. This number will quickly tell you where you stand in the eyes of lenders. If your score is below 700, you should consider paying down previous debt to better your score before applying for a loan. Many banks won’t even consider a score that is below 620.

Be Prepared to Pay 20% of the Purchase Price

Not only do banks love it when the borrower is prepared, but many banks require customers to pay 20% of their loan up front. Even if your bank doesn’t require it, it can mean the difference between getting a loan or not. Banks know that people are less likely to walk away from a loan they’ve paid 20% on. It can also cut your interest rates substantially. Don’t quite have the 20% you need? Consider looking at your UFX markets account or your other investment portfolios, if you have them. This may be a time when making a withdraw is worthwhile.

Come Prepared

It doesn’t matter if you’re getting a loan for a new refrigerator or a house, you need paperwork to back up your claims. You will need proof of income, which can be check stubs, but many banks prefer tax returns. If you rent a home, you should also bring the contact information so that the bank can verify that you pay your rent on time. If you’re considering a larger loan, and own a car, you may also want to bring the title, which the bank will use as collateral on the loan.

Present Yourself Professionally

It doesn’t matter if your credit score is perfect or if your income is $100,000 a year, the way you present yourself can have an affect on your loan. When visiting the loan office, dress professionally. In fact, it’s better to overdress than to dress casually. Treat the meeting with a loan officer as a business meeting and act professionally. These simple acts will let the bank know that you’re responsible.

In today’s economy is can be hard to get a loan, let alone a good one. Thankfully, there are still tips you can use to ensure your loan is what you need. It begins by checking your credit reports and score so you know where you stand. You should also come prepared with a 20% down payment and the documents the bank needs to process the loan. Last, but not least, present yourself in a professional manner.

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