Signature loans can be a great help when you need a large sum of cash to purchase a home or vehicle, pay off high interest debt, or make improvements to your property. If you wish to obtain a signature loan to use to make a big purchase, and you are afraid you may not get a positive result when you apply, there are a few steps you can take to improve your overall chances in getting a loan approval. Try these tips in the months before you plan on applying for a loan in an attempt to give you a more favorable chance at an approval without a high interest rate.
Enlist A Reputable Co-signer
A signature loan is a bit different from a personal loan as it does not require collateral to be put down in exchange for money. Since the pre-requisites may be a bit harsher to get an approval, you may want to consider having a co-signer help make your application a bit more enticing. Having someone sign along with you will make it easier to get a loan as the lender will have another source to get payment from should you not make timely payments on your own. Having someone with a great credit score sign the application with you will give you an edge in approval over applying on your own.
Monitor Your Status Regularly
Knowing your credit status can help prepare you in knowing when the right time will be to apply for a loan. There are three credit reporting bureaus that monitor your credit status: Experian, Equifax, and TransUnion. Each of these allows for one free annual credit report per year, which will indicate troublesome areas to improve on before applying for a personal loan. To get the most out of this feature, select one each four months to keep on top of your most recent credit status. If there is false information on your credit report, you can call the credit reporting bureau to start an investigation in disputing poor scores. If you try to obtain a loan without checking on this first, you may find you are declined even if it not your fault your score is low.
Strengthen Your Credit Score
If your credit score is lower than 630, you are more likely be unapproved for a loan due to the risk the lender would have that you may not make payments on your account. If you do get approved, your interest rate will be very high. To increase the likelihood of an approval with a competitive interest rate, work at increasing your credit score number well in advance of applying for a loan. This can be done by making timely payments on all credit cards and by paying more than the minimum if possible. Stop using credit cards altogether to make purchases so your balances are decreased quicker. Pay off cards with smaller balances as the number of cards you have with a balance can impact your overall score.Share