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How to Get Pre Approved When You Need A Loan

When you are in need of a loan, knowing what the pre-approval process entails can help you get the money you need even faster. If you are able to have the documentation together before it’s asked for, that can speed up the process, but that’s not all you can do to speed things up. Here are a few ways to get pre-approved for a loan when you need the money most.

Know How Much You Need

The first part of the pre-approval process is knowing just how much money you are going to need to borrow. You will need different documentation based on if you need a small personal loan than if you are going for a large mortgage to buy your dream home. Once you know the amount you will be requesting, this can help you determine the necessary steps to the pre-approval you desire.

Understand Your Credit Situation

Before deciding to apply for any type of pre-approval, you should run your credit report. This will give you an idea on what your credit score is, what type of debts you have, and how the credit bureaus view your history of making payments. The more debt you have, the harder it will be to get pre-approved for a large loan. Lenders like to see people who have very little debt compared to the amount of credit they have access to, and who have a long history of paying their bills on time. If this is not what your credit history shows, you may want to take the time to correct this damage and start showing financial responsibility on paper.

Get Your Documents Together

When going through a standard pre-approval, you need to have some common documentation. For example, you should be prepared to show some type of proof that you have been working at the same job for a while and have steady income. Usually lenders will ask to see your check stubs. Plus they want to see your last 2-3 years of taxes to prove the type of income you have had, so they can see for themselves that you can pay back the loan amount. You will also need to provide documentation to any extra income, such as child support, alimony, work bonuses, or overtime. You will need proof of who you are, such as identification with your picture on it, and you will also likely need to show your recent bank statements. Once you have this documentation together, you should be able to approach your preferred lender and get pre approved for the loan you need.

Making sure you understand what lenders want from you is a small part of the process. Knowing why they want it makes it easier to understand. The more you know about your financial situation going into a lender, the better your odds are of getting the pre-approval you want. If you plan on going out and getting a loan for something you need in your life, make sure you have everything prepared ahead of time to make the process flow as quickly as possible.