Ready to take the next step on buying your dream home? Here are a couple tips to help you apply for a personal loan.
How much can I afford: On your way to applying for a loan? Great! Your first step is to consider how much you can afford. The best way to figure this out is to consider your income and budget. You know your finances best. Keep in mind that lenders do not want prospective borrowers to exceed 28%-44% of their monthly income. If you need assistance figuring out your budget, many banks or loan borrowers offer mortgage calculators that crunch the numbers for you.
Check Your Credit Score: Not sure what your credit score is? It is best to check before applying for a loan. Lenders look at borrower's credit scores, also known as Fico scores, to make a decision for loan prequalification. The higher the credit score, the easier it is for the borrower to obtain a loan. Running a personal credit report is free, easy and takes only minutes. Not only is it good to know for your financial wellbeing, but it also helps to ensure there is no fraudulent activity on your credit report. Identity theft often goes unnoticed before victims are made aware.
Pay Down Your Debt: If your credit score is low, paying off your debt can help to give it a boost. Your debt has a significant impact on your credit score. Opening too many lines of credit, such as credit cards, can hurt your score. Therefore, opening news cards to consolidate multiple credit cards is not always a good option at this time.
Show You Have Stable Income: Other than your credit score, lenders want potential borrowers to have a stable income so they can make on time payments. Lenders will ask about one's annual income before prequalifying anyone for a loan. Before applying for a loan, try to improve your annual income, if possible.
Submit a Joint Application with a Co-Signer: Potential borrowers can apply with a cosigner to improve their chances of being qualified. If the borrower's credit score is low, having a co-signer with a higher credit score will improve your chances. It is important to be mindful of who to ask as a co-signer. Often close friends, relatives, or significant others tend to be the most popular choices.
Find a Lender: It is important to find the right lender. Though many look like they offer similar services, that’s not always accurate. As a title agency, we work with some of the best financial professionals throughout the state of New Jersey. We can match you with a lender that meets your particular financial situation.
Have questions? Let us connect you with a lender that is the best fit for your needs. Give us a call at 732-359-2009.