What Is a Loan Application

Introduction

 A lender will base the decision to decline or approve a loan based on the information contained in a loan application.  For most consumers, loans use a type of fill in form where you put down all income, job history, references, bank account balances, debts and things of this nature. You also may be asked to specify exactly why you are seeking out this loan and have to show that you have a means to repay it back.

 

 

 

When trying to obtain a business loan, you will be required to submit more information to the potential lender than those who are seeking out a personal loan would have to give. Business loans typically ask that you provide a business plan that would include the projected cash income flow and the cash that will be spent total toward the project. With this type of loan the purpose must be clearly stated to the lender, along with the period of a repayment schedule. If needed you may have to provide a collateral which is basically a guarantee on the loan saying that it will be repaid back. Many people when starting a business use their home as a business collateral.

 

To improve your chances of getting a successful loan application, there are several things that you should do.

• Make sure that you pay your bills on time. By paying your bills on time you will show credit lenders that you are worthy and responsible in being able to manage your bills.
• Check your credit report for any errors that may be showing up. This could be anything from a wrong address, to an account that should have been paid off but is still showing a balance due. If this were to occur you should always file a dispute with the credit bureau and also contact the company who has this inaccurate information on your report. Speak with a supervisor and demand that it be removed as soon as possible.
• Make sure that any current credit cards that you have do not hold over 30 percent of the available balance. If at all possible pay those down before applying for a loan. This shows creditors that you use your credit wisely.
• Haggle with any creditors to try and get any charge offs, any late payments and any other black marks off your credit report before filling out a loan application.

 

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