3 Pivotal Steps to Boost Your Chances of Loan Approval
It’s been a well-established fact that applying for loans isn’t exactly like a walk in the park. You need to go through a lot of hoops just to get approved, and it requires some time and patience to do it. While it may seem like a tedious and almost impossible task to most people, getting approved for a personal loan is very much attainable. All you have to do is boost your chances of getting approved before you submit a single application. If you’re considering applying for a small personal loan in Memphis, TN, right now, here’s how you can improve your chances of being approved.
Get Your Credit Report in Good Shape Before Applying
Probably one of the biggest considerations lenders look at is a borrower’s credit score. You’ll want your credit score to be as high as possible if you want to get the best deals for a loan. To make sure your credit report is ready to impress a lender:
Check Your Credit Report for Mistakes - Mistakes on a credit report are actually much more common than you think. In fact, one in five credit reports contains an error of some kind. It’s your responsibility to check for these and to make sure any incorrect information is rectified before you apply for an installment loan in Memphis, TN.
Pay Down Your Debt and Keep Your Credit Balance Low - Credit utilization ratio, or the amount of credit used relative to the amount of credit available, is an important driving force in your credit score. So if you have any debts, make sure to pay them off as soon as possible to boost your score.
Make All Your Payments On Time - paying debts is one thing, but paying them on time is another matter. Yes, paying your debt won’t matter as much if you always pay late. A single late payment could be devastating to your credit, so make sure you always pay them on time.
Stick with Your Job and Keep Your Income Steady
It may be easier said than done, but staying in one job for a long time and keeping your income steady is actually one of the best ways to boost your chances of approval. Remember, lenders are always looking for signs of stability when reviewing a borrower’s application. They need to know if you’re making enough money to pay back the loan and that your income comes from a reliable source. Whenever you change jobs, lenders will notice the sudden big drop in your income, which is a big thing to consider. Try to keep your work situation the same, especially in the months before taking out a personal loan.
Keep Your Loan Term Short
Long-term loans sound like they’re easier on the wallet since you’ll be paying less for a much longer time. In reality, they present a greater risk to a lender since the more time you have to pay off the loan, the greater the odds that something will go wrong and leave you unable to make your payments. You’re also paying more than you should since you pay interest for a longer period of time. As much as possible, opt for loans with a shorter term even if you’ll be paying a higher amount for your monthly payments.
There’s no universal formula for winning approval of a personal loan application. It’s all about increasing your chances of being approved. As long as you know how to improve those chances, you don’t have to worry about being rejected for a loan.
Magnolia Finance believes that loans shouldn’t take too long to process and approve. We understand how important it is to have the means to get cash when you’re low on funds. That’s why we offer some of the best personal loans in Memphis, TN, that involve hassle-free approvals in no time. Contact us today to apply for a loan!