Know Everything You Need To Know To Speed Up The Process
If you’re waiting for approval for a personal loan, every minute can last a year.
Although it feels like it takes a long time, when you think about what needs to be done, approval for a personal loan demands a detailed process. Once you’ve submitted all of your details, the lender still needs to run a background check, verify your financial situation, confirm your employment, and pull a credit check. Online lenders have revolutionized the industry by using algorithms that carry out these calculations and computations within a few seconds. On your end, however, you can also speed up the process by being prepared.
Here we’ve put together a step-by-step guide to help you speed up the process:
1. Make sure you’ll be eligible
Before you apply for a loan online, check that you meet the lender’s eligibility requirements for age, citizenship, and employment. You might also need to have a certain minimum monthly income and/or minimum credit score, or a minimum credit history length.
Luckily, leading online lending marketplaces like LendingTree use calculators to work out how much repayments will be for the amount and term that you want. This way you can make sure you’re actually able to afford the loan.
Also, once you know you’re eligible, It’s also a good idea not to request the maximum amount that a lender offers. For example, if the maximum loan amount is $50,000, request $40,000.
2. Check your credit score before you apply
Every reputable lender will run a soft credit check before they send you a pre-approval offer, and a hard credit check before the final offer. If there are errors on your credit history or unexplained activity, you'll have to wait while the lender contacts you. If you make sure to correctly calculate your credit score and that your credit report is clear before you apply, your approval will go much more smoothly.
Online lending portals, like AmOne, automatically check and match your credit score with lenders. By simplifying the process, they help you find the best options that match your credit score.
3. Gather all documentation
Some lenders will ask you to send in documentation along with your initial loan application. Others will only ask for it after they’ve sent you a preliminary loan offer. It speeds things up to find all of the documentation you need before you start the application process.
Usually, you'll be asked for:
- Proof of identity, such as your Social Security number
- Proof of address, usually through a printed utility bill.
- Proof of employment and income, such a W2. If you're self-employed, you'll be asked for bank account statements.
- Documentation regarding any other income, like dividends, interest on savings accounts, and rental income.
LendingPoint is an online service that enables you to upload all of this information easily with minimal hassle, making them on of the most highly rated online sources for personal loans.
4. Be prepared to answer questions
You might need to answer some questions about your financial situation, like verifying your employment status or your monthly income. If you’re self-employed, you’ll be asked for some follow-up information. You’ll also need to wait while the lender runs a hard credit check, and you may need to answer some questions if there is anything unusual in your credit history.
5. Wait for a reply
Most online lenders will give you an initial response within a few minutes, but you'll have to wait a little bit longer for final approval. Thanks to their advanced algorithms, most online lenders will let you know if you've been approved within a couple of hours, or at least by the next business day.
Find a Lender for You!
Now that you understand the process of getting approved for a loan, you can go ahead and take the plunge. Check out and compare out top recommendations.