If you are borrowing money for the first time, you need to understand that not every first loan applicant is fortunate to get approval for a loan that he/she is applying for. There are so many reasons why some lenders find it difficult to approve a loan even after a lot of work has been done.
Here are valuable tips to help you get approval for a loan:
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You Need to Establish a Steady Record of Paying your Bills Promptly
Before approving a loan (especially a loan that is taken towards the purchase of a house), many lenders will take time to go over how well you have dealt with credit in the past. Most lenders will review your credit accounts; this includes credit cards, utilities, installment debts (student loans, car loans etc). you need to make sure that you bring every overdue bill up to date ASAP and begin to pay your bills promptly.
Tips for getting your loan
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Establish a Steady Record of Having a Steady Job
Lenders are known to bestow their favor on the applicant that is gainfully employed and has held his or her job for about 2 years or more. For instance, if you have held a job for less than 24 months, you need to expect that the lender will want to know the reason why. Reasons that are acceptable to lenders include:
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You have been laid off work
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You just graduated from school, left the military or vocational training
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Regular job changes are common in the line of work that you do (contract staff, sales etc); however, you have been able to stay employed and earned a consistent sum over the past 24 months.
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The nature of your work is seasonal and periods of breaks in employment are typical to that particular field.
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Have a Good Reason to Borrow Money!
Lenders will naturally want to know what you intend to do with the money that you wish to borrow. In many cases, simply informing them that you need the money to build a good credit rating is not enough! You can boost your chances of getting your first loan when you categorize yourself with the group of borrowers who are known to have lower default rates.
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For instance, borrowers that borrow money to purchase luxury items (i.e. vacations, Designer items, Cosmetic surgical procedures) are known to have a low default rate than those who borrow for money to take care of necessities.
Your loan may not be approved if you give the following reasons for applying for a loan:
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Avoiding jail by ensuring the payment of child overdue support
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Having a gang related tattoo removed from your face
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Purchasing drugs for re-sale purposes