Getting a personal loan is a fundamental process when you are in dire financial need. For this reason, it is very disheartening when your application is turned down for whatever explanation. There are a number of options you have following such an occurrence. Since it is almost impossible to foretell when you may require loan services, it is important to keep your credit record flawless. The simple reason for this is that if there are any mistakes, it would be very hard to get them corrected in good time, especially because when it comes to loan applications, time is of the essence. Having full knowledge of your credit ratings is also crucial as it allows one to have realistic expectations of the likelihood of getting a loan.
It is vital that the details provided on the loan application form are true, and this will often include area of residence, employment records as well as income over a defined period of time. In case you have had unfortunate encounters which have tainted your credit history, you may want to attach a letter explaining the circumstances. The letter should be brief and precise, and in it you must include the efforts you are making in improving the situation. This is crucial because it helps the officer in charge in making a proper decision.
You must also be ready to provide a collateral in cases where getting a personal loan entails having it secured. It is advisable, however, not to use this option since it is accompanied by a high risk. If you must, the collateral could be any asset that is in your legal possession, whether a car or real estate. The reason this is important is because in case you do not repay the loan, you lose the collateral.
When getting a personal loan, you will need a co-signer, and just as the name suggests this is a person who signs the loan application with you. Their job does not just end at signing since in case you do not repay the loan, they are entirely responsible for it. Due to this, many people are not too willing to be co signers, and for good reason. Loan defaults end up straining the relationship between the two parties. To make this easier, it is advisable to pay off a given amount of money every month.
Following rejection of your loan application, you may want to visit another financial institution to see whether your needs will be met. This is important because different institutions have different policies on lending loans. If your credit history is not impressive, you may consider getting an institution which deals with such cases. Of course there may be more stringent policies in the latter, but you stand to gain so it is a worthy decision. This presents a golden chance to improve one’s payment schedule.
It is a huge blow if you application gets turned down, but to counter this, you must do everything that is in your capacity to ensure that you get it right the first time. Be clear with your financial past, as well as work diligently to maintain a great record. In addition, avoid defaulting on the loan as you may need to use the very same credit facilities in the near future. This is further heightened when you use a co-signer. It is vital to preserve the co-signer’s integrity by making timely repayments throughout the pre-specified period.