Once you understand the basics of a loan, it’s important to know how to get a loan. Acquiring a loan can be a very difficult and time-consuming process. However, if you have the proper documentation and have done your research, things should go a little smoother. For those who have not yet read our article titled “What is a Loan?” we encourage you to take a read-through. Understanding what a loan is and what is involved, is crucial to maintaining good financial health.
To Recap: A personal loan is a fixed amount of money that is paid back over a period of time. Personal loans are typically taken out in order to cover cars, home renovations, and debt consolidation. You can receive a personal loan from a bank, credit union, private lenders, and others. Read more about what a loan is and other key information here.
Getting a personal loan during bankruptcy involves gathering proper documentation, understanding how it will be received, and ensuring you are in a good financial position. Learn more about bankruptcy and personal loans in the article below.
Bankruptcy and personal loans – what documentation is needed to get a loan?
In order to apply for a loan, you will need to provide your lender with some documentation. For instance, most lenders require proof of regular income, a bank account, and a permanent address. All of these documents are necessary so that the lender can first, determine whether you will be able to pay off the loan. Have your paystubs, identification documents, a utility bill, and other supporting documents. Be sure to have the bulk of your documents organized prior to speaking with a lender.
When you apply for a personal loan, you need to understand that most lenders will run a credit check. Your credit report is helpful to lenders because it provides key information about your financial status. From a credit check, lenders will be able to consider credit scores, credit reports, and debts. All of which can impact what kind of loan you can qualify for. This is why it is important to have a good credit score.
Find the best personal loan rate.
Before you settle on a personal loan, it is important to shop around like you would with any other big-ticket items. Take your time and search for the best interest rate for your financial situation. Comparing loans and lenders is a necessary part of finding the best rate. This process will also give you an understanding of what you qualify for.
One of the best places to start looking for a good rate is at your own bank or credit union. This is especially true if you’ve been a longstanding customer. Some lenders will allow you to go through a prequalification with a soft credit check. This means that the check won’t impact your credit score. However, many lenders will run a hard credit check as part of the application process. In order to prevent a series of hard inquiries, you will want to do your shopping in a short window of time. Keeping your shopping period between 14 – 45 days will ensure that each check is only counted as a single inquiry.
Finding a lender when you are in bankruptcy and want personal loans.
After finding the best rate given your financial position, it is time to pick a lender. Be very careful that the lender you choose is reliable. It is easy to be scammed or offered a deal that could negatively impact your financial stability. Doing your due diligence is detrimental to your safety in applying for a loan.
Once you’ve found a reliable lender, you will want to read through the terms and conditions of the loan. Do not skim the contract, as there could be hidden fees or terms that you are not comfortable with. Ask your broker to clarify any parts that you do not understand. For further clarification, you may consider having a lawyer read through the contract to ensure nothing is missed.
Finally, when you have been approved, you will need to come up with a plan on how to pay off your payments as they are due. If you are unsure of how to do this, check out the Money Management section in our credit education centre for more information.
For more information on getting a loan and the loan process visit the loan section in our credit education centre. You are also welcome to contact one of our experienced professionals at TransCan Leasing. Our team would be happy to help you navigate your finances during this time.