How to Qualify for a Personal Loan at a Lending Institution
Feb 15, 2008 L. Marie Dubuque
Find out the annual percentage rate on a bank loan - Stockxpert
Find out the annual percentage rate on a bank loan - Stockxpert
Want to consolidate credit card debt or need a loan to pay for emergency expenses? How to get an unsecured loan at the bank.
It
used to be, when you needed a loan you went down the street and talked
to a friendly banker, and it was a done deal. Now, with lenders
tightening their belts, and banks skittish about taking on customers
with little or no payment history, getting a personal loan is no easy
task.
How to Approach a Bank for a Personal Loan:
* Start with a local lender.
The bank down the street is still your best bet. A lending institution
in your own neighborhood is more likely to lend you the cash. Your
chances are much better is you have a history with the bank. If there is
a teller you always deal with, talk with him/her first. If that person
knows you, even only as a familiar face, he might put in a good word
with the manager.
* Plead your case matter-of-factly.
If the reason you need a loan is for medical expenses, you don’t need to
go into a lengthy dialogue as to the nature of your impending surgery. A
simple statement, "This is for elective surgery," will suffice. Be
professional and courteous. Point out your long-standing history with
the bank, and a stellar employment record wouldn’t hurt either.
*
Negotiate the interest rate.
Do some research first. Find out the prime rate before you walk in the
door. So even if you are offered a loan, make sure the APR will make it
worthwhile. If the bank is only offering a rate of 18 percent, go
somewhere else. You can even find a credit card that offers a better
rate than that.
*
Consider a second mortgage. If you
own your own home, a home equity loan or line-of-credit may be your best
option. But try for an unsecured personal loan first. Remember, if you
fail to pay a second mortgage or HELOC, you could lose your home.
* Find out about loan processing fees upfront.
Many lenders will charge you "points." One point is usually equal to
one percent of the loan amount. So, if you’re planning to consolidate
credit card debt, keep in mind the processing fees before you sign the
paper work. You may be better off finding another credit card with a low
introductory rate. Just pay attention to balance transfer fees.
Finally,
ask yourself if you really need the loan. Is this something you could
save up for? Or if you’re trying to lower your credit card bills, could
you contact the card issuer and try to negotiate a lower rate? Chances
are, you may not need this loan as badly as you think you do.
Read more at Suite101: Applying for a Bank Loan: How to Qualify for a Personal Loan at a Lending Institution | Suite101
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