The Secret
To Getting Loans
During A Credit Crunch
Many people are looking
at the falling prices in the housing and automotive markets as a good time to
make a purchase, but they are held back by reports that getting a loan is near
impossible. Yet, it is possible to get a loan during a credit crunch! So
we're in the middle of a credit crunch and you're thinking about making a large
purchase? You are not crazy and you are not alone if you feel now might be a great
time to buy that house or car you've had your eye on. Though reports are rampant
that banks are tightening the fist on loan extensions for any purpose, it is possible
to get a loan during a credit crunch if you know what lenders are now looking
for and set yourself up to their standards. Though the
standards are much higher than they were just a year ago, many people can still
find a lender willing to work with them. Even people with less than stellar credit
ratings can find a loan in today's market if they know how to impress a lender.
Evaluate Your Financial Status The
first step in securing a loan during a credit crunch is to honestly take stock
of your financial status at this time. You must have a stable job with adequate
income to afford the price of the car or home you want to purchase. A lender will
be looking for proof that you can afford the overall cost of the loan, so be ready
to demonstrate that your current employment is stable and you have a good track
record of working in the past. One option is to go for
a lower priced car or home in order to prove beyond a doubt that you can afford
it on your current income. If you have your heart set on a higher priced item
and do not want to settle, then be prepared to prove your stability and income.
If you do not already know your FICA score, find it out
before filling out a loan application. A stable job with adequate income backed
by a high credit score is the best bet for securing a loan right now. The more
you can improve this score before applying for the loan, the better. Prepare
To Apply Securing a loan during a credit crunch requires
a little preparation before going into negotiations with lenders. Once you know
your credit rating and all of the flaws on your credit report, it is time to look
at some things you can do to make yourself more attractive to a lender. Lenders
like to see unused credit on a report, so if you can pay off credit cards with
high balances and not charge anything else on them you can start to improve your
credit rating in a short period of time. If you have charge cards you don't normally
use such as department store cards, do not close those accounts. The fact that
you have those credit lines available but have not used them is a sign of security
and confidence in the eyes of a lender. Start living off
your actual income and do not put any further debt on credit cards. Keep your
credit card balances as free as possible and make all of your payments promptly.
A late payment here and there might not have been a big deal a year ago, but it
is a huge deal in a credit crunch. You do not need perfect
credit to find a loan in this market, but you do need to show positive signs that
you make your payments on time and can afford to make a large ticket purchase.
If you do not have a great credit rating, there is always
the option of cold hard cash. If you can present a sizable down payment a lender
will be more likely to take you on. Actually, a down payment of thirty percent
or more could actually give you prime rates. Securing
a loan during a credit crunch is not impossible. You just have to be prepared
to prove your means to pay up in the future.
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