How to Qualify for a Bank Loan

Qualifying for a bank loan isn't as easy as it once was. Banks have had to tighten restrictions to avoid risky lending. Before you walk into a bank and ask for money you'll need several items. Most banks need to know what the money is for, and you'll need documentation proving you can pay it back.

Getting a bank loan can be a convenient way to cover expenses without worrying about where the money will come from. However, it's not always simple to qualify for these loans. There are several things you should do to determine if you're eligible and prove to the bank that you're good for the money.

• Check your credit. Regardless of the type of bank loan you want your credit will be pulled. It's better to be armed with this information before you start the loan process. If there is something on the credit report that can be disputed, you want to start this process and take documentation with you. This way you aren't walking in blind.


• Pull proof of income for at least the past 12 months. You can use bank statements that show direct deposits or pay stubs for this. The bank needs to see that you've had steady employment for at least a year to be considered for any kind of loan.


• Look at your existing credit cards and loans. If you have several cards that are maxed out or other loans that you're slowly paying off this is going to hurt your chances of getting a bank loan. Pay down what you can and start reducing your debt. If you want a bank loan to consolidate you may be better of going through an actual consolidation agency instead. If you have lots of open credit cards with little to nothing charged this can also hurt. The bank will see this as having too much available credit and will less likely to lend if you can't explain why those accounts aren't being used instead of the loan you're applying for.


• Consider collateral. Many bank loans will want collateral to ensure the payments on the loan are made. If you don't have collateral you may need to find someone to co-sign the loan with you.