When you’re getting a loan, there is a lot to know. Whether you’re applying for a loan to purchase a home, vehicle, consolidating debts or paying for an expense, there are a few things to keep in mind. And as your bank, we’re here to make your life easier! Here are a few helpful tips as you prepare to apply for your first, or next, loan.
Check Your Credit
To approve you for a loan, we will first run a credit check. To avoid any surprises, it is recommended that you run a check prior to applying for the loan, especially if you’re getting a loan for a large amount. All the major credit bureaus allow you to check your credit for free once every 12 months. Checking your score consistently will allow you to review the score for errors, in addition to allowing you to know the likelihood of you being accepted for a loan.
Getting a loan is a big deal. Whether it is a secured or unsecured loan, you want to make sure you understand the terms of the loan. If there is anything you’re uncertain of, or would like more details about, don’t hesitate to ask! Lenders are more than happy to answer questions. And doing so can make you feel more comfortable with the terms and the lender.
Avoid Applying for Multiple Loans
This has a split meaning. When you apply for a loan, don’t get multiple loans and overborrow. This can make repayment of the loans a mess. If you need a large amount, getting it in one loan is the easiest way to manage the funds.
The other meaning of this would be to avoid applying for a loan, then not following through on it. If you’re shopping around and submit applications to multiple lenders, this will result in multiple hits to your credit. This makes finding the right lender before applying an important part of the process.
Watch Your Debt to Income Ratio
A debt to income ratio is a comparison of how much debt you already have (from credit cards, mortgage loans, auto loans, student loans or other personal loans you may have that you are still paying off) to your annual, or monthly income. The lower this ratio is, the better your chances of getting a loan. A low ratio could also result in getting a lower interest rate. The reason being that the lender sees less risk in approving you for the loan.
Make Sure to Keep Your Paperwork
While asking questions is important at the time of signing for the loan, keeping a copy of the paperwork can be just as important. If you ever see anything that you think may be incorrect on a statement or a payment amount that seems off, you can refer back to your paperwork and confirm whether there was an error, or if the change was warranted. While the lender can also answer your questions at any point in time, if you are unable to reach them, the paperwork is a good reference for a variety of questions.
You can learn more about our loan products, or apply for a loan on our website at https://centralnational.com/personal/lending.asp. If you have any questions before you apply, visit one of our conveniently located branches in Kansas and Nebraska, or call us at 888-262-5456.