Are you ready to get a loan?

What if you realize that your funds are simply not enough to meet your current needs? You might need to purchase a home, a car, pay off medical or school bills and you need the funds now not years later.   In that case is a loan right for you?

Loans – They are everywhere!

I never liked the idea of owing anyone, whether it was the man on the corner or some bank.  However times are changing and having and using credit has become a way of life.  If you listen to the radio, read the newspaper or go on the Internet you are overwhelmed with various companies offering several loan options.

In fact there are some large amounts being offered by these companies with seemingly little problems being discussed in securing the loan.  These companies use words like ‘low interest’ and ‘easy to qualify’ to assure consumers that they will be getting the best deal by taking the loan from their company.

This type of transaction usually can be a lengthy process in banks and credit unions so the concept of being able to walk away with the loan amount on the same day suggests that there is a fast turn around time with very little waiting. These companies are in direct compettion with the larger lending agencies so their advertisements try to entice new customers.

However there is very little mentioned in those advertisements about what you need to qualify besides documentation. They certainly don’t mention that you might be turned down for the loan if you don’t meet set criteria.

So what do you need to know about loans?

Loans – How do you qualify?

Most loan companies prefer that you have steady employment preferably with an established company.  If you are self employed then you would have to prove that you have the ability to pay back your loan each month.  This requires evidence from your bank. Some companies also run credit checks to see if you are a bad risk. This credit check is done before any agreement is signed and is a part of the decision making process.

The qualification process is usually detailed as customers must list their assets to determine what can be used as collateral if they can’t pay back their loan.  Some loans are referred to as ‘unsecured’ loans and these do not require the use of collateral to determine risk.

After gathering personal information, the loan officer will need information that will confirm your address and place of employment.  This means that they will require payslips for at least three months, job letters and bill payment records for proof of address.

Loan applications can be turned down for a variety of reasons.  Some applicants are not properly prepared and the don’t do the necessary research to identify the documents such as mentioned above that they will need to access the loan. Some loans require guarantors and if applicants are unable to locate one then they will not be qualify for the loan.

So are you ready to get a loan?

If you are ensure that you have all that you need to qualify and do your research to get the best interest rate. Ignore the gimmicks just focus on the right type of loan for you!

What are your thoughts on the issue? Let me hear from you!

Teri Ann Renee Paisley

Gleaner online writer