How To Get Approved for a Personal or Debt Consolidation Loan?

Personal loans are a very popular and effective way to get fast access to cash for a variety of needs. Getting one is quite simple. Typically, lenders will look at your credit score, credit history, and income when deciding to approve you for a personal loan. If you have a less-than-perfect credit score, you might not qualify for the most attractive terms with a traditional bank.

However, if you diversify your search, you’re likely to find options that match exactly what you’re looking for, regardless of your financial background. There are plenty of things you can do to make it more likely that your request for a personal or consolidation loan gets approved. Here’s everything you need to know.

What Can You Use a Personal or Consolidation Loan For?

A personal loan can help you pay for a wide range of planned or unplanned expenses. This includes things like home improvement, a vacation, medical expenses, a new purchase, and a financial emergency, among others.

You can even use it to consolidate multiple high-interest debts, including from sources such as your credit card, into a single, fixed-interest loan. If you get a consolidation loan from the right lender, it can help you significantly lower your monthly payments and save you thousands of dollars a year.

Tips To Get Your Personal Loan Approved

The key to successfully obtaining a personal loan is to work with as much information as possible. Know where you stand and cast a wide net to discover all your options.

1. Know Your Credit Score

It’s a good idea to have a handle on your credit score at all times, as a matter of course. A score of 700 or above is good, whereas anything below 550 is considered poor. Where you’re placed on this scale matters because it affects the loan terms you’re likely to receive.

Annual percentage rates (APRs) or the rate of interest you pay on your loan can range from less than 8% to over 35%. Your borrowing rate can depend quite a lot on your credit score. What’s more, certain institutions may even deny you a loan altogether if you have poor credit.

However, a high credit score may even secure you a larger loan amount with an extended payment period, allowing you to make smaller monthly payments. Some tips to maintain a high credit score include paying your bills on time, paying off credit card debt as quickly as possible, and minimizing any new debt.

2. Consider Lender Requirements

In order to get your personal loan approved, you must meet lender requirements. Different loan companies will have different provisions, so it pays to know exactly what these are. Usually, lenders will take into account your credit score, but they may also review your borrowing and repayment history. They may want proof of a stable income as well as a low debt-to-income ratio, all of which they use to gauge whether you’re likely to pay back the loan on time.

It’s worth noting that while these are standard practices, some lenders may also consider other criteria. This includes whether you’re able to provide collateral or a co-signer. They may also be willing to take into account your educational background or employment history when deciding whether to get you approved for a personal loan.

3. Work Out Exactly How Much You Need to Borrow

Before making a formal loan application, it’s a good idea to run some numbers and zero in on exactly what you need instead of an approximate figure. Factor in the interest as well any possible origination fees — what some lenders charge to process a loan application — to get a handle on what your total repayment amount is going to be.

If you think a slightly smaller loan amount would serve your purpose, it might make you that much more likely to get your personal loan approved.

4. Consider an Online Lender

Traditional banking institutions, which are often operated as franchises, tend to have fairly rigid rules in place when it comes to lending. As a result, a slightly poor credit score or lack of a credit history may work against you.

Online lenders, however, are usually empowered to consider a wider category of criteria when making lending decisions. Usually, they accept a larger variety of applicants and can often help secure more favorable loan terms than you might find elsewhere. This makes them a good bet to get your personal loan approved.

Partner With Lending Tower

Lending Tower was established to provide people with fast and easy access to necessary funding. We believe there is more to an applicant than just their credit score, and we’ve helped thousands of borrowers across the U.S. achieve financial security. See highly competitive rates, starting as low as 5.99%, and fast funding when you partner with us. Reach out to us 24/7 to learn more about what it takes to get a personal or consolidation loan approved at Lending Tower.