Choosing A Better Loan

A Few Tips to Help You Apply for a Loan

by Görkem Talsma

Loans make it possible to buy the things that you want when you don't have the available funds. Different types of loans serve different purposes. How do you go about protecting your credit score while getting the money that you need? Here, you'll find a few tips that can help.

Limit Your Loan Applications

Don't just go and begin filling out multiple applications hoping to get at least one approval. Each time you submit an application for credit, it shows up on your credit report. So, if a creditor sees that you've recently applied for several loans and have been approved/denied, it could have a big impact on whether or not you're approved for the loan that you want.

Before you submit an application, read through all of the fine print. You need to know everything about the rates, the penalties, and repayment schedule before you apply. There's no reason to apply for a loan that is not going to provide you with the rates or the repayment schedule that you can keep up with. This will decrease the number of options relatively quickly.

Do the Research

There are lots of great lending institutions out there, but there are also some that just aren't as good. You want to find a company with good feedback from prior customers and that is established so you don't find the company out of business before you've completed your repayments.

Look for a company that has raving reviews about customer service. Even if every other element of the service is less than you'd like, at least you'd have the customer service there to help you work your way through it.

Don't Overextend Yourself

Before you apply for a loan, make sure that you have the money to make the payments each month. If you're behind on any of your other loans of credit card payments, don't apply for another loan. The one exception is if you're taking the loan out to pay off a higher-interest credit card or to combine multiple accounts into a single payment. You should never create more debt to pay for existing debt.

Talk with your local loan officer to learn what you can do to get the money that you need without putting yourself in a bad financial position. He or she will guide you to the best possible option to meet your needs without putting you over your budget.