When you need to start a loan process, some questions might pop up in your head.
Is my credit score good? What if the loan process doesn’t go as I want to? Will I get the money I need soon enough?
Getting an installment loan is not a linear process, there are many factors to consider before having a final approval by a lender.
As you know, here at Oxford Funding, we specialize in giving installment loans to our customers.
If you have never applied for a loan before, it is normal not to understand how the process works.
Nonetheless, we will tell you everything you need to know regarding the loan process in this blog post.
Just remember that there are many different types of loans. The mortgage loan process is not the same as the auto loan process, for instance.
Therefore, comprehending our needs is the first step before finally applying for a loan.
Do you need a car? Are you looking to live in your dream home? Do you want to pay for a wedding?
Answering these questions will give you a bigger picture of the loans’ requirements. So, without further addition, let’s get into it.
First, check your credit score
This is the first and foremost step before applying for a loan.
Your credit score will provide the lenders with detailed information related to your credit history.
If you have taken loans in the past and successfully paid them, you should not worry.
On the other hand, if you failed to accomplish your duties as a borrower, you might not get qualified for a loan at all.
Don’t worry, there are always options for people with bad credit. You just need to know where to look and what to look for.
Still, consider that most lenders will definitely check your credit score and credit report.
Remember that loans represent a risk to the lenders, so the lowest the risk is, the higher are your chances of getting the loan approved.
The keyword here is “risk.”
Lenders don’t want to take any chances with people that might not pay back the loan.
Yes, there are standard requirements related to asking for a loan, but as long as you can prove to the lending company that you will actually be a good borrower, you will be able to get the loan approved.
Loan process steps - detailed information about your loan’s journey
You are about to start your loan process. There are many reasons why you might need a loan right now.
As we mentioned before, it is crucial to understand what we are going to do with the loan if we get the approval.
The steps for getting a mortgage approved won’t be the same as the steps for getting a traditional installment loan.
So, when you comprehend exactly what are your current needs, you will be able to make a final statement regarding the loan type.
Nonetheless, we will review three of the most common steps when applying for an installment loan.
Step 1 – Apply for the loan
Fortunately, you can apply for a personal loan online. You can even do it here at Oxford Finance Services, so you don’t need to leave home at all.
The lender will ask you for vital information in order to proceed with the application.
First, you will need to give your birth date, your name, phone number, address, and, of course, your Social Security number.
At this point, it’s vital to know the desired loan amount. Sometimes, you also need to mention the desired term and purpose upfront.
Depending on the lender, they may ask you for the most recent tax returns, recent bank statements, and other requirements.
Step 2 – Review the offers
Secondly, the lenders will review your application and determine the likelihood of you paying back by looking at your credit history.
Be sure to check the interest rates of the loan before accepting it.
Also, consider the fees and all the things related to the exact amount of money you will end up paying at the end of the loan term.
You can be declined by a lender and approved by another. It all depends on the financial institution’s policies.
Either way, we recommend you do research before declining or accepting an offer. Consider that lenders will also take a look at factors such as:
- Recent applications.
- Payment history.
- Credit utilization.
- Your current income.
Step 3 – Accept the loan
If the offer seems like a good fit for your needs, it is time to accept it.
But this is not over yet, the moment to make payments will start soon. In that case, we give you five magnificent piece of advice to help you never miss a payment:
- Always note your payment due date.
- Build the payment into your budget. Naturally, this should have been done beforehand, but don’t forget to do it!
- Try to set automatic payments.
- Always have enough money in your bank account to cover the payments.
- Use the loan for its real intended purpose.
And that’s basically it. Nonetheless, the steps may change depending on the type of loan you are applying for.
Either way, most of the requirements repeat themselves.
Consider this before getting a loan
Lenders will look at all the parameters mentioned above before finally approving a loan.
If we had to choose the most important parameters, we would say that the credit score, source of income, and overall credit history will always be lenders’ first interests.
This creates the need to take care of our credit score as much as we can in order to have loans approved in the future.
Always remember that loans are based on risks. If the risk of lending you money is high, the chances of getting a loan will be lower.
Therefore, knowing the factors that lenders prioritize provides us with the required knowledge to get into a loans’ journey with all the tools we need to materialize our objectives.