Smart Ways to Obtain a Loan

Smart Ways to Obtain a Loan
  • Opening Intro -

    Consumers seeking to borrow money can turn to a bank or a credit union for a loan.

    To quality for a loan you must meet certain lending parameters and have the means to pay back what you have borrowed.


Your credit score is an important factor, information you should obtain first before applying to your financial institution. By following the smart ways to obtain a loan you can increase the likelihood that you will be approved and at a favorable interest rate.

Review Your Credit

Every consumer has a credit score, a three-digit number that is based largely on your credit history. That credit history is collected by three credit reporting bureaus: Experian, Equifax and TransUnion, and is updated frequently. By managing your credit wisely, you should have a high credit score. Review your credit first by obtaining free copies of your credit reports by visiting

Your Personal Income

Besides your credit history, lenders will take a close look at your personal income. That income can come from a job or through other sources such as a pension or a structured settlement. Your personal debt-to-income ratio should be in good shape and can be improved by paying down your debt and increasing what you earn. Your creditworthiness will hinge in large part on your ability to repay the loan with a personal savings account and a larger down payment helping your cause.

Where You Bank

While your credit history and personal income are important considerations in determining whether your receive a loan or not, another factor to consider is your trustworthiness. Trust is built upon personal relationships, therefore if you have one with your banker it can factor in to your lender’s decision. Use that relationship to make an appointment with your banker before formally applying for a loan to determine whether your loan application will likely be approved and with what terms.

Asking For Help

If your financial picture is a tenuous one at best and you still need the funds, then asking for a co-signer can bolster your chances of receiving a loan approval. Keep in mind that the person that co-signs your loan is responsible for making payments in the event you default on your loan. Your so-so credit will fall if your default, but their good credit can quickly turn sour as well. Make sure that your co-signer understands your financial picture and is willing to assume the risk if you should default.

Loan Considerations

You can also increase the chances that your loan will be approved by offering collateral as security. Personal loans are typically unsecured and harder to get, while a secured loan may be attainable if you offer a fully owned asset as collateral. Putting more money down can further your cause too as lenders will see that you are willing to assume more risk.

See AlsoHow to Obtain a Personal Loan


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Categories: Loans

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".