The Key To Getting Your Loan Approved: Keeping The Six Ps Of Borrowing Money In Mind1 min read
Every time you fill up a loan application form, there is always a 50-percent chance that you’ll get approved. To increase your chances, look through the eyes of banks and financial institutions, and see how they screen loan applicants.
Banks use rigorous methods to find out if a person has the capability to pay off his debt. Using these criteria, they can make sound judgments on whether or not a person is fit to get a loan. Learn about the six principles of loan application and boost your approval rate.
While bankers may not be shrinks or hold degrees in psychology, personality plays a big factor when they assess potential borrowers. They evaluate attitude, emotion, behavior, and applicant’s actions on how to deal with different situations.
Where will you use the loan? What do you aim to achieve with the money you just borrowed? For a credit institution to lend you money, they must determine the purpose of the loan, and how it will materialize your payment.
Bankers think in the long run, and this also includes whether or not your purpose will be successful in the future or not. If they do not see that potential in your prospect, both you and the bank will be on the losing end of the loan.
How will you pay your loan and what are your sources of income? These are just some of the questions asked by creditors when assessing your capability to pay. Put simply, the more sources of cash you have, the better your chances have when applying for a loan.
If the purpose of your loan is to start a small business or something that will give you a new source of income, then they will determine whether or not your venture will generate enough income to pay off your loan and at the same time, make pure profit.
Much more commonly known as collateral, creditors may ask you to give them a piece of guarantee that you will pay off your loan. Cars, real estate, bonds, stocks, and future payments—these are just some forms of protection banks will ask for risking their money for you.