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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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If you are considering the purchase of your first car or even your next vehicle if you’re not a first time car buyer, you may be concerned about the prospect of financing your vehicle. This concern is not totally unfounded. There are numerous pitfalls that can occur when financing a new vehicle, especially if you plan to use dealership financing. In order to avoid running into these problems, and possibly stalling your purchase read the tips below.

First, understand exactly how important your credit score is to your auto loan application. Even when working with a dealership loan department, be aware that your credit history will be run and your credit score will have a major impact on your ability to obtain an auto loan as well as the terms you are offered. Ideally, it is best to stay on top of things and get an idea of the condition of your credit history yourself before you even step foot into the dealership. Look to make sure there are no errors on there that could be dragging down your score. If your credit score is not in great condition and it is not due to errors, consider delaying the purchase of a vehicle until you can clean it up by paying down some other debts and improving your bill payment schedule; both of which will help to raise your credit score. Remember, a low credit score can prevent you from getting a better interest rate as well as the loan itself.

Many people make a list before they go shopping to ensure they won’t spend more than they intended. A similar technique can help to ensure you won’t spend more than you can afford while car shopping. Make a list of what you’re looking for in a vehicle, the features that are important to you and set a price range you can afford to spend. Keep in mind that you should not plan to spend more than 20% of your monthly income.

Take the time to do your research and understand current interest rates as well as the price range for the features you have determined are important to you. This will help you to be better educated and less likely to be taken advantage of when it comes time to discuss terms of the loan.

Be aware of your options. Find out whether any rebates or special offers are available for the cars that interest you.

Never, ever sign anything unless you have gone over the purchase contract with a fine tooth comb. Far too often, extraneous charges will be tacked on that may not be really necessary. If you’re not sure of the reason for a charge, ask before you agree to pay it.

Don’t allow yourself to be pressured into anything. If you need more time to think, take it. Walk out of the dealership, think about it and make your decision on your own time. Salesmen are excellent at driving up the pressure and creating an inflated sense of ‘time is of the essence’ but that doesn’t mean you have to fall for it.

By doing your research ahead of time, knowing what you want and what you can afford to pay for it while maintaining a cool head you will be in a better position to purchase the car you want without running into any pitfalls that could cost you big in the long run.

Joe Kenny writes for SelectLoans.co.uk, a UK personal loans comparison site, visit us today for information on all loan topics including secured loans and links to leading UK providers.
Our Site: http://www.selectloans.co.uk/

Tags: auto, borrow, car, cost, Finance, insurance, interest, lending, loan, personal, purchaseauto, borrow, car, cost, Finance, insurance, interest, lending, loan, personal, purchase

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There are so many car financing options available how do you know which one is right for you? Read on to obtain information about all of the different options available and how to determine which one will provide you with the best benefits.

Many people take advantage of an option known as dealer financing. This is when you handle the financing of your new vehicle directly through the lender. Now, that doesn’t necessarily mean you’ll be making your payments directly to the dealer. Usually, they work with a finance company to provide the financing to you. There are definitely some benefits to this option. First, depending on your situation you may be able to obtain extremely low interest rates; in some case you may be able to obtain a zero percent interest rate. In order to obtain this special rate; however, you will need to have excellent credit with no problems. If you have any problems at all on your credit history you will not qualify for the special interest rate although you will probably be able to still obtain a loan; just at a higher rate. When your credit report is not perfect ask yourself whether you could get a better deal at a bank.

Bank financing is an option that is typically available as long as your credit history is good. This means it doesn’t have to be perfect but you shouldn’t have any major flaws either. If you have already worked with the bank in the past this will increase your chances of obtaining a loan. While a bank interest rate may not be as low as what a car dealer can offer for individuals with excellent credit, it may be better than what you could obtain at the dealership if your credit is only ‘good.’

Another option you may wish to consider is credit union financing. Of course, this option is only available if you belong to a credit union. If you do happen to have a credit union membership; however, the rate available to you may be much better than what you can obtain through a bank or dealership.

These days it is also quite easy to simply go online and surf around for a quote from an online lender. This option has become so popular many lenders are now willing to compete with one another and offer very attractive rates. In the event you do not have perfect credit, this can be a good option for you; just make sure you fully understand all of the terms of the loan before accepting it.

Another option would be to simply borrow the funds from a family member of friend. Of course, this is extremely risky because it could cause problems in your relationship in the event that you run into a problem with the payments. But, if you can’t obtain a loan elsewhere because of credit problems this may be a good option.

Finally, you may wish to consider refinancing your home or taking out a home equity loan in order to finance the cost of your new home. This basically allows you to pay cash for your vehicle with the proceeds of the loan and then paying back the money through the refi loan. In some cases you may be able to get a better interest rate with this route than you would with a traditional bank auto loan. In addition, the interest you pay on the loan is tax deductible. Like other options; however, there are some disadvantages. With this option, be aware that you could be putting your house at risk, not just your car, if you run into a problem and can’t make the payments in the future.

Joe Kenny writes for SelectLoans.co.uk, a UK personal loans comparison site, visit us today for information on all loan topics including secured loans and links to leading UK providers.

Our Site: http://www.selectloans.co.uk/

Tags: auto, borrow, car, cost, Finance, insurance, interest, lending, loan, personal, purchaseauto, borrow, car, cost, Finance, insurance, interest, lending, loan, personal, purchase

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