Applying for a loan is something most every American will do at least once in their lives. From a young age, we apply for loans to finance our higher education, like college or technical school tuition. After that, we’re confronted with responsibilities like new car loans, mortgages, and other personal lines of credit.
When you need a line of credit, you also need to hand over sensitive information. Your social security number, credit score, income, outstanding debt, payment history, and more all come into question when you’re being considered for a loan.
There are a few steps you can take to give yourself the best chance you can at getting approved for your loan, while also keeping your financial and personal information safe. Here are a few ways to get started:
1. Do your research
With the current digital takeover, you can find information for just about anything online. This is exactly where you should start when looking for a loan. You don’t have to decide to go with an online or a local lender just yet. But, gathering information on current rates and market trends will allow you to be more prepared when you do make that decision.
According to Forbes Personal Finance, you should always understand your options well before making any moves. Regardless of whether you’re applying for an auto loan or a mortgage, you’ll be flooded with tons of information. Careful research gives you a solid foundation for negotiations later down the road.
2. Online or local?
After you’ve done lots and lots of research, you should be well equipped with a wealth of information. Now it’s time to choose between a local and an online lender. This really depends on your preferences. A local lender would be someone like a local credit union or bank. Going local gives you more opportunities for meetings in person to go over everything. Most people prefer a local lender because they feel as though they’re more trustworthy.
Don’t discount online lenders, though. Even though the process will be mostly automated, you will come in contact with representatives and brokers that are there to help. As with any applications, online or in person, make sure they are secure. When applying online, all applications requiring sensitive information, like social security numbers, need to be on encrypted SSL webpages. These secure pages are a good safeguard for your private info.
3. Come prepared
Once you’ve decided on a local or online lender, it’s important to come to any meetings prepared. No matter if you’re meeting in person, or just applying online, you need to have all of your up-to-date information in front of you. Take the time to gather:
- Social security card and government ID – make copies to be extra prepared
- Proof of address – use utility bills or recent mailers
- Proof of income – collect as many recent W2s and pay subs as you can
- Monthly debt – create a detailed list, outline totals and month payments
- Gross income – how much you make each month, before taxes
- Other details – employment history, previous addresses, etc.
Having all of this information in front of you means you’re going in prepared. You can confidently answer any questions your lenders or customer representatives may ask. Be sure that any copies are made on secure machines, and they’re handled with the utmost care by your loan officers. Best of all, you’ll have the proof you need to obtain the loan amount you’re looking for.
4. Consider your options
Most people might think that an online application or a meeting with a local lender means they’re locked into the loan they’ve been offered. Unless you’ve signed a contract, that’s never the case. Offers are just that – until you agree to terms, you have the freedom to consider your options. Every loan is different, and so are the options you have to secure one.
For example, instead of getting a small personal loan from your bank, you can consider a payday cash advance. These are often easier to get with lower credit scores. Same goes for mortgages. If you’re a first-time home buyer and had trouble getting a conventional fixed-rate mortgage, try applying for a FHA loan instead.
Securely applying for a loan is all about research and preparedness. You never want to go into a loan without knowing all of the details. This allows you to better protect yourself and your other investments. Stay smart, stay secure, and you’ll end up with the perfect loan for your situation.