If you’re trying to get your loan approved quickly, know that conventional bank loans will always take longer. This is because banks have a lot of regulations they need to comply with. Since banks report to the central bank, they must follow extensive guidelines, and the paperwork is usually lengthy. On the other hand, a hard money loan from a private lender can get approved a lot more easily.
No matter which type of loan you’re applying for, these tips can greatly boost your chances:
Know your limitations
The first step is always to be cautious! As a loan applicant, you must be aware of your own credit history and what does your credit score mean. It’s always better to request a copy of your credit score from the relevant credit agencies a couple of weeks prior to the application. Review it in detail and give yourself enough time to correct and dispute errors, if there are any. The most common types of errors are wrong accounts and incorrect credit limits.
While you’re at it, check up on the credit score range you must fulfill in order to get approved for a loan. This will help you set more realistic expectations from the lending institution. This will also help you understand your financial limitations so you could apply for the loan that you can repay easily. You could also use this information to specify the loan type that suits your requirements the most.
Clean up your credit
The higher the credit score, the better are your loan approval chances. The easiest way to give your credit score a boost is to be vigilant about your monthly payments. Make your debt payments before the due date and pay more than the minimum if you can. This will benefit not only your credit utilization ratio but also the availability of credit.
While you’re at it, you could also request an increase in your credit limit. Just call up the phone number at the back of your credit cards and request an increase. This could especially help if your income has increased since you first acquired the card.
Re-balance your income and debt
Most loan applications will initiate the process by considering your annual income. Other than just the monthly paycheck, you can also include any part-time work or a side-hustle to add to the figure. This might help you put up a stronger case.
Other than this, try and pay down the debt in a way that improves your debt-to-income ratio. This ratio is calculated by dividing the monthly due debt payments by the monthly income. If this ratio is lower, it shows that you have greater control over your debt and can manage it well.
We’re not just talking about other loans and payables. You can also bring the debt figures down by selling some of your liquid assets. These include any stocks held in taxable accounts, short-term securities, and government securities.
Finally, when you have all the paperwork ready, you can apply for a hard money loan from a private lender.
Global Capital Partners Fund LLC offers hard money loans at affordable rates across Philadelphia, Miami, and Atlanta. To take a look at their real-estate financing services, head straight to their website now.