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5 tips for getting a personal loan from a bank

[Dec 17, 2010.]


Personal loans are available from a variety of sources. One of the first places you may approach to apply for a personal loan is a bank in your community. While some banks have become more strict with approving personal loans, that doesn't mean you can't qualify for one. Consider the following five things that might help you get a bank loan.

1. Choose the right bank

Banks are more likely to help their own customers who have a history of doing business with them get a loan. Open a checking or savings account at a bank that has locations near you. Ask questions compare all the features, services and fees before becoming a customer at a particular bank.

2. Get to know key individuals

While a lot of banking can be done online these days, establishing a relationship with people who work at your local branch could work in your favor when it's time to get a loan. Get to know the folks who work in your branch so that you become a familiar face to them.

3. Clean up your credit

It goes without saying that having good credit is an important piece of the equation when you apply for a personal loan. You won't automatically be turned down for a loan if you already have some debt, but banks will be unwilling to lend to you if you have a history of late payments or have defaulted on a loan. Even if you plan to apply for a loan from your bank, it's important to have as clean a credit history as possible.

4. Consider a home equity loan

You might be able to qualify for a home equity loan or home equity line of credit (HELOC) if you are a homeowner. The more home equity you have, the better your chances of qualifying for a loan. Consider getting a HELOC if you don't need the whole sum all at once. With a HELOC you can have access to cash when you need it but can keep interest payments down by not borrowing the entire credit line at once.

5. Look for alternatives

If you can't get a loan from a bank, there other sources of funds. Credit unions make loans, but you'll have to become a member to apply for one. Social lending web sites are another potential source of funds, but you'll still need decent credit to get approved. Research these and other alternatives that may be available to find the best solution to your funding needs.


About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.

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