There is this misconception floating around that you will need to pass through the eye of a needle before you can qualify for a loan from your preferred bank. The truth is, banks want to make loans to the public because this is one way they can make a profit. However, since bank loans are usually big amounts it is not surprising that banks are very careful about whom they give a loan to. So how can you get that bank loan you want fast?
First, you need to prove to the bank that you are a good risk. This means you have the capacity to repay the loan within the timeframe you agree to. This is where many lose their nerve and back off. But to be a good risk all you need to prove is that you have a regular influx of income as well as assets that can serve as collateral for the peace of mind of the bank officials.
Second, you might need to have a guarantor to sign the bank documents with you. This means the guarantor is vouching for your credibility as a good risk because if you fail to repay the loan for some reason the guarantor will absorb the liability. So the guarantor also has to prove that he/she has a regular income and stable assets to repay the bank with in case you default on the loan.
Third, it is very helpful to have a history of managing credit well. This is called building a credit history. In the US you would need to consult the credit bureau while in the UK you need to contact the credit reference agency. The names differ but the organization’s function is the same – to compile a record about your use of credit among different financial institutions. If you have built a great credit history and you have no history of defaulting on payment of credit then a bank would be more accommodating of your request for a bank loan. You might even qualify for a bigger loan amount than you initially requested for.
In the end, getting a bank loan approved is a case to basis thing. You might have an easier time applying for a bank loan than most of the people you know simply because banks evaluate loan applications on a case to case basis. So take heed of the steps outlined above when trying to get a bank loan approved.