What Do You Have To Do To Get A Loan?

Although the banks have promised to start lending again it appears that many lenders are still operating a tough approach to requests for loans, it can seem like an uphill task to get an application for finance authorized.

However, knowing the criteria that banks pay most attention to and how to make a request for credit look more attractive can improve the chances of getting approved.

Bank underwriters are cautious and when they assess applications for loans, they tend to view any kind of changes warily. It is therefore never a good idea to make sweeping lifestyle changes just before making a loan application.

Thinking of moving house? Whilst that in itself may not be sufficient to get an application refused, being a long-term resident in a dwelling will help to bump up the number of points on your credit file.

Likewise, if you are considering quitting your job or going self employed, opting to make the change just before a loan application is likely to be viewed dimly and will seriously hamper any chances of getting credit.

Read moreWhat Do You Have To Do To Get A Loan?

A Loan in Shining Armor (and other stories)

In difficult economic times, most people are tightening their belts and restricting their spending to absolute essentials…that is of course, providing you consider a suit of armor an essential requirement.

When applying for a loan, the lender generally asks the reason for the finance, expecting to be told the money is for home improvements, a new auto or possibly to cover the cost of getting hitched.

In recent times, some people have asked their bankers to provide the collateral for them to undergo cosmetic surgery, with boob jobs and liposuction commonplace.

However it seems that not everyone opts to borrow money for such mundane purposes as a glimpse into the banking world has revealed a plethora of weird and wacky reasons for the request for cash.

Read moreA Loan in Shining Armor (and other stories)

Student Loan Payment Countdown!

The 20th is the day that my wife’s student loan payments come due.  We have them automatically deducted from our checking account.

One of the payments is within striking distance of being paid off.  When we got married, it was the ‘larger’ of two loans, as it had the larger balance, the larger monthly payment, and the larger interest payment.  We aggressively worked to pay it down, applying ‘extra’ money that we came across at various points (including portions of our tax refunds, an inheritance, and my wife’s income while she was working) to bring the balance down.

In January 2009 it actually became the smaller of the two loans from an outstanding balance perspective, which was a great milestone.

We are now on track to have this paid off by the end of the year.  The December payment will bring the balance down to $0!

That will free up approximately $200 per month in payments.  We had originally planned on applying this balance towards the second student loan, which would allow that balance to be paid off around the end of 2012.

We are currently re-thinking this strategy.  Instead, we plan to just spend the money frivoulosly each month on electronics, video games, clothing and music downloads.

Cool, right?

Just kidding!

That’s totally not what we’re doing.

We are going to apply the $200 towards debt.  We may, however, apply that toward the mortgage instead.  The mortgage and the second student loan payment are the only two debts we’ll have.  The mortgage has a larger balance, a much larger interest rate, and while it won’t bring our payoff anywhere near 2012, it will eat the balance away a lot quicker than the student loan payment would.

In other words, it’s the instant gratification (well, as much instant as two years can be) or the more bang for your buck.  We still have a few months to make a decision on what to do with the ‘extra’ funds, but either way, we’re committed to applying the entire amount to debt once this particular loan goes away.

Any thoughts?