Process -Applying For Loan Essay

Every person must be prepared to face circumstances in which he/she might have to borrow money from a bank. While credit cards have made short-term financing quite easy, some individuals sometimes seek a particular type of loan. For example, a person building a house may seek a house-building loan or a person looking forward to purchasing a car might look for an option in that particular section. Thus, knowing the proper steps to applying for a loan is extremely necessary in order to select the best option and successfully achieving it.
First and foremost, the loan-seeker has to understand what his/her own preferences are. For this, a comparative analysis is very necessary. One has to go through the offers by all competitors. One has to select the type of loan one is looking for and then read the terms and conditions offered by every bank. This comparison is relatively easy now that the banks have provided documentation of all packages online so that one can access them at one’s own convenience. If the goal is to pay off the loan as fast as possible, then one has to look for options that are favorable in that arena or vice versa. In the case of specific types of loan, one has to look out for the best deal.
Next, once a favorable option is found, the loan-seeker should contact the bank directly in order to confirm his/her understanding of the terms and conditions. It is necessary to comprehend all clauses in order to be crystal clear on the requirements. The loan-seeker may note down questions for several options during the first step and seek answers to those questions from the bank directly. This may further help in finding the best deal. Once the deal is found particularly favorable, the loan-seeker may schedule a meeting with a bank officer in order to discuss the eligibility criteria for the loan. Every bank has different requirements, and it is better to be au fait with them in order to increase chances of approval.
After gaining awareness of the requirements, the loan-seeker should obtain his credit history and match the current score with the range specified by the lending bank. If the score falls out of range, it might be impossible to convince the bank to enter into a loan agreement. This is because lenders rely on the past usage of credit. The loan-seeker should only apply for a loan for which the repayment schedule is favorable and easily manageable. There is no point of applying for a loan with such a harsh repayment schedule that the bank refuses the application in the first instance.
Once satisfied with everything, the loan-seeker can apply for a loan with the bank. It is advised to make use of a checklist to ensure that all relevant documents have been provided to the bank within the deadlines specified. A detailed discussion regarding the checklist can be held with a bank officer in order to ensure that no item has been missed from the list. Documents may need to be obtained from past employers, current employer, creditors and other sources.
At this point, the loan application process is complete. Loan officers may take their time in verifying all documents and responding to the application. It is better to discuss with them the procedure of follow-ups at the time of application so that the loan-seeker can follow-up at appropriate intervals.