Applying for loans can take a lot of time. If you are denied for the loan after application, you just wasted your valuable time and being rejected is frustrating too. Luckily, there are a few tricks to know beforehand if you will be accepted or not.
One way is using a loans eligibility calculator. With a few simple steps, you will know if your request for a loan has a high chance to succeed. Fill out the calculator with the preferred loan amount and duration. Furthermore, you have to put in some personal information, income, and the reason for the loan. Press the calculate button, and you will have your answer. Of course, this is a generalized test and will not give a 100% guaranteed acceptance from a particular lender, but you already have a strong indicator if your request seems eligible or not.
To be sure about acceptance, check the requirements of the lender you are aiming for. If you fulfil all the requirements, you are almost certain to be accepted by the lender. Typical requirements to be accepted are the following:
Credit requirement – You have to check the credit requirement of the lender. If you don’t meet the requirement, you are almost certain to be rejected. Minimum income – Many lenders also have a minimum income requirement before accepting loans. Make sure you meet this condition as well. Sufficient collateral – If you have sufficient collateral to pay of your debt, you increase the chance to be accepted.
Lenders reduce their risk when they can get the loan back through your collateral. You run the risk of losing your collateral when you are unable to pay off your loan, but with sufficient collateral, the acceptance rate goes up considerably. Current outstanding debts – When you already have outstanding debts, the chance of acceptance for a new loan is reduced.
A particularly helpful tool is the debt-to-income ratio to determine if you are eligible for the loan. The reason for the loan – Check which reasons are allowed for loans by the lender. Don’t apply for a loan when your reason is not allowed by the lender. Find another money lender that services your kind of loan. Employment requirements – What kind of income does the lender require? Do you need to be employed for a certain amount of years, show steady income as a free-lancer, and can you also use other sources of income to back up your request? If you can comply, you are one step closer to acceptance.
Proper preparation, fulfilling all requirements of the lender, and a little bit of common sense is all you need to know if you will be accepted before you apply. Do your homework and avoid rejection for loans. Furthermore, be careful with loans that are at the limit of your financial power. Be sensible and responsible to protect yourself from financial problems. If you need new loans to pay off old loans, you will be caught in a downward spiral of earning money just to pay off interest rates.