There is a lot of advice out there about getting a loan, but a lot of the advice is about getting and maintaining good credit, comparing rates and shopping around, and to apply online because this is the quickest way to get approved. This is good advice, but there are a lot of other things that people don’t talk about and this is why we created this post. We want to deal with a few of these things.
We will call these tips extras because they include things that most people won’t think about or do. The good news is the tips we’re going to talk about are commonsense stuff. With that said, if you want to apply for a secured loan, then check out these three tips, because the chances are they will apply to your current situation.
- Must Read – How to Get Equity from Your Home Without Selling
Choose The Right Type of Loan
This is an extra tip and an obvious one, but you want to apply for the right kind of loan. Secured loans are great for using your home’s equity to purchase large ticket items, and there aren’t many loan products out there that allow you to borrow thousands to do things such as pay medical expenses, travel or to make improvements to your home.
However, you still want to make sure that a secured home loan is what you want to get and if it is, then make sure you choose the right loan product. Alternatively, you can find a guarantor loan, which is similar but secured by a third party.
A secured loan that involves you using equity in your home is good, but only if your home has enough equity for what you need. For example, you need to get a loan that has a loan-to-value ratio of at least 75-85 percent, if you have around $50,000 in equity, but you need $40,000 so you can make improvements to your home or for a property you just purchased.
The bottom line is you want to make sure your budget will allow you to accommodate the loan amount you want to get.
Get Your Credit Report
Lenders are going to view your credit report because they want to see what kind of risk they are taking. In order to get a secured loan, your report will be looked at carefully. In fact, your report will be a large factor in whether or not you are approved for a loan.
This is why it’s a good idea to see what is in your report before applying for loans. Look for stuff such as if you’re current with your accounts or if you have defaulted on any loans and things of that nature.
There are three major credit reporting agencies, so ask them all for your credit report and they will give it to you. If there are inaccuracies in them, then try to correct them.
- Also Read – Top 10 Best Credit Rating Agencies in the World
Accurately Complete Applications
One last tip is to fill in your application properly and don’t leave blank spaces or small mistakes like that. This can actually slow the process down and it can result in you being denied a secured loan. Also, don’t lie on applications because the more truthful you are, the better your chances of getting approved for a loan will be.
Believe it or not, but getting approved for a secured loan doesn’t take that long and many people do get approved for one, as long as they have a good amount of equity and if they have a decent credit history.
If you consider the above three tips and follow them, then you could end up being approved for a loan. Do make sure you follow the other advice you find online because that will come in handy too.