The Global Economic Crisis that has been raging for the past few years has made it very difficult for anyone to obtain almost any kind of a loan from banks. This is because the banks and other lending bodies and financial institutions have become very afraid of the repayment capabilities of ordinary people who have average pays. One of the reasons why the crisis started in the first place was that people were not returning what they owed, and many banks went bankrupt because of this.

So, for this reason, the institutions that lend money have tightened the requirements for getting approved for a loan. In order for someone to get a loan, he or she is required to take an ‘Ability to Repay’ test, which will has to convince the lending body that you will be able to service your debts in the future. Basically, the test is conducted by the institutions going over your credit report and checking to see whether you are responsible with your payments. They will check your income, your current debt, how well you managed to service those debts, how much can your debt possibly rise and basically, everything else that is in some way connected to your finances.

Here I will present you with a few ways that will get you to your goal (and that is getting approved for a loan) faster and better.

Credit cards are not welcome

The only people who can use credit cards irresponsibly are probably the celebrities with very high paychecks. For ordinary people, credit cards are something that should be dealt with very responsibly and with great care. The reason for this is that when you obtain a debt through your credit card, the interest rates are the worst that you could possibly find. And, in the end, borrowing that money so quickly cost much more.
Now, when you take out a credit card, the bank allows for a maximum amount of indebtedness, taking your bank account and your paycheck into consideration. When the possible lender is looking through your record, he will calculate that your credit cards’ debt is full, even though you have never borrowed a cent. For this reason, it is very important to keep only one credit card, and get rid of the others when you want to borrow money.

Clarify your financial picture

Your financial information is vital to passing the ‘Ability to Repay’ test. This means that you should give the possible lender a clear picture of what is going on in your financial life.
What most people do when they want to get a loan is that they provide, as per minimum instructions, only the report of the last two paychecks to the possible lender. While this is acceptable, it may not show clearly how your finances are working. Imagine you have a low base salary, but in the last months you have acquired much money through bonuses that you received. You will want to show that in financial picture, and that will only be possible if you provide some other form of your salary recognition, besides the last two paycheck amounts.

Do the browsing

What every individual must learn and accept about the financial industry is that it is a market. The financial institutions are offering their services of money-lending for a certain price. Now, as with every market, every institution has its own prices for its services and it happens often that these prices are very different. So, my last advice would be: shop around! You can’t know whether or not you are getting the best deal if you haven’t checked all the others. Visit a few banks and see what they are offering, talk with your friends or with someone who has had borrowing experience before, get advice from professionals, it is all allowed. No one is going to hate you for it. All that matters is that you get the best possible deal, and nothing else.

Being that the terms for obtaining a loan have become stricter than before and that prices are getting higher and higher every day, you might want to consider following these tips. They will most certainly help you in getting the loan deal that you need. Surely, they can do no harm.

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