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Everyday people go to the bank with a loan request written on the back of a napkin and end up getting denied for a loan. Ever wondered why? The obvious reason is they are not qualified for the loan because of a lack of employment, insufficient income, too much debt, poor credit, no previous credit or any combination of these factors. But are these the only reasons? Maybe, maybe not. Keep in mind that bankers are on a salarythey get paid the same amount of money whether they work hard on your deal or not. You see, lenders tend to group people into categories known as A, B or C-borrowers.

A-borrowers tend to be perfect people with perfect credit and high income to debt ratio. B-borrowers tend to be people who have decent income, decent credit and a decent income to debt ratio. C-borrowers, on the other hand, have marginal income and marginal to poor credit ratings. And then there are the projectslenders also tend to group projects into categories known as A, B and C-projects. Here are a few examples of how projects are ranked: A-projects are the kinds of loans the lender likes to doclass-A residential home loans from, say, $100.000.00 and up. B-projects may be a used car loanC-projects could include a debt consolidation loan for a marginal borrower. C-borrowers and projects are often quickly denied. You can see more clearly now how borrowers and projects are basically ranked in the mind of lenders.

Remember; bankers are human and humans tend to take the path of least resistance. If you were a banker, would you rather do a slam-dunk million dollar loan to someone who didn’t need the money or work real hard (day in and day out) trying to fund risky C-projects for marginal borrowers? Most people are not perfect borrowers and you may fall into this category. So what do you do to increase your chances of getting the loan you need? Here’s a few secrets that can help get the loans you need: First, ask yourself a few questions Does your loan request make economic sense? If it doesn’t make sense to you, it probably won’t impress the lender. What can you do to structure the loan to make sense? Secondly, if you were a lender, would you (really) loan yourself the money considering your income, credit and project?

Whether you answer yes or no, you should identify why or why not? Do you have a professional bank package or is your loan request written on the back of a napkin? By having a professional bank package you will get the attention of the lender because most people don’t know how to assemble a bank package. By having a bank package, you can move yourself from a C-borrower to a B-borrower status in the mind of a lender. If you are a B-borrower you can move to A-borrower status. Why? By creating a bank package you have done your homework (and much of the work the lender needs to make a decision) in a format that professionally communicates with the lender. Here’s an outline for a basic bank package for consumer (or business) loan proposals in the order shown below:

1) Cover letter (to the lender, lending institution, brief overview of package and purpose)

2) Loan summary (purpose of loan, use of funds, payback plan, economic justification, etc.)

3) Table of contents

4) Standard bank application for review (get it from the bank)

5) Statement of assets (everything you own that can be used as collateral)

6) Statement of credit debt (all outstanding debts with totals and account numbers)

7) Photo-copies last two (2) years of tax returns

Photo-copies last two (2) years of payroll stubs

9) Supporting documentation (borrower’s resume’, explain past credit problems, documents, etc.)

You want to organize your bank package using an inexpensive 3-ring binder. A bank package does not guarantee financing but it can greatly improve your chances for funding tough deals.

Copyright © 2006
James W. Hart, IV
All Rights reserved

James W. Hart, IV, a consumer advocate and CEO of Smart Books Publishing http://www.smart67.com has been involved in the field of residential and commercial real estate mortgage financing since 1987. Hart, previously licensed to engage in the sale of real estate in the state of Ohio, has been directly involved in the origination of residential and commercial mortgage financing and has worked with residential and commercial mortgage lenders, large commercial mortgage banking firms and life insurance companies for financing. Hart is an honorably discharged veteran of the U.S. Army, graduate of the University of Toledo and graduate of the Cleveland Institute of electronics. He is a member of the National Panel of Consumer Arbitrators and the Council of Better Business Bureaus, Inc. During 1992/93 Mr. Hart appeared on a number of radio and TV stations throughout the U.S. including WJR-AM, WWWE-AM, WHUR-FM, WRC-AM, WLW-AM, WTVN-AM, WSPD-AM, KDKA-AM, KBGS-AM and CNBC-TV and many others

Tags: Banking, bankruptcy, cash, financing, lending, Loans, Money, personal financeBanking, bankruptcy, cash, financing, lending, Loans, Money, personal finance

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In August 2005, the people of the gulf coast United States suffered record losses of life, homes and businesses from Hurricane Katrina. Merely months before, thousands lost their homes and lives in Southeast Asia during a reckless Tsunami. Although it is hard to imagine the threat of natural disasters and emergencies until we find ourselves involved in one, it is always smart to plan ahead. Use the following three tips to help gauge whether you and your family are financially prepared for an emergency situation or disaster:

1. Start an emergency savings fund.

Many individuals and families find it difficult to save for the future. While it is important to save for your retirement or your child’s higher education, you cannot forget to plan ahead in case of an emergency. Insurance can help during a time of crisis, but very rarely does an insurance claim cover 100% of the damages incurred from a natural disaster or other emergency. By putting away small amounts of money each week, month or pay period, saving for an unexpected event can be very easy. Plus, with automatic online transfers and direct deposit, banks and credit unions can automatically transfer money from your paycheck each week to make your emergency savings much easier to swallow.

2. Stay insured.

Disasters do happen and it never hurts to be prepared. While it is easy to think, “it’ll never happen to me,” the monthly insurance cost will seem like pennies should you find yourself in an emergency situation without any insurance helping to repair or rebuild your home. If you live in a region traditionally prone to certain natural disasters such as earthquakes, floods or hurricanes, it is important to look into the specific types of insurance designed to financially protect you from the danger most common to your area.

3. Know what you own.

If you are a victim of a disaster or emergency and you place an insurance claim on property or belongings, your insurance company will want to know exactly what was lost. It is important to keep track of your most valuable belongings as well as proof such as photos and deeds to property. Make a list of all of your valuables, and be specific. Be sure to take pictures of the current state of each of these belongings, like your car and the different facets of your property, as proof of damage should a disaster strike. Make copies of your photos, as well as your family’s important documents. Keep these items in a locked safe or safety deposit box where at least one copy is out of harm’s way at all times.

ABOUT ACCC: American Consumer Credit Counseling (ACCC) is a non-profit 501 (c)(3) organization dedicated to empowering consumers to regain control of their lives through education, counseling and debt management. ACCC provides individuals with the practical solutions for solving financial problems and recognizes that consumers’ financial difficulties are often not the result of poor spending habits, but more frequently, from extenuating circumstances beyond their control. As one of the nation’s leading providers in consumer financial education and credit counseling services, ACCC works with consumers to help them with the best plan of action to reduce their debt and regain financial stability. For more information or to access free financial education resources log on to www.consumercredit.com.

Tom Palange

Education Programs Specialist

American Consumer Credit Counseling

Tags: ACCC, Banking, Banks, Credit, debt, Disasters, Emergency, Finances, insurance, Money, Relief, savingACCC, Banking, Banks, Credit, debt, Disasters, Emergency, Finances, insurance, Money, Relief, saving

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