Usually, when you want to borrow money from a bank, the bank will ask you for collateral, or some type of security. This is usually something which the bank can hold on to which makes them comfortable that you will repay the loan. For a personal loan, a bank may or may not ask you for security when they have done business with you for a while, know how much you earn or make, and also know you as a trustworthy customer.
Here are a few ways through which you can improve your chances of getting a personal loan from a bank:
1. Find the right bank: You
need a bank that will be willing to meet your needs. Look for a bank that
focuses on retail and consumer banking, that is, banking for individuals. Banks,
which focus on large companies, will usually not be able to offer you a
personal loan. Compare the retail-focused banks, looking at their products and
their pricing. Find out which of them gives you the best value.
2. Be ready to prove how much
you earn or make: You should have documents, which show how much you earn
in a month or year. Lenders will like to see this information and want to be
able to check that it is true. These documents can be pay slips, bank
statements, dividend warrants, rental agreements and such. Make sure that the
documents which you hand over to the bank are neat, clear and easy to read, and
properly organized.
3. Have collateral or security:
Banks are usually more willing to give loans if you have something of value,
which they can hold on to and which gives them some comfort that you will repay
the loan. Banks usually charge higher interests rates for loans, which they
give without security.
4. Prepare yourself for
questions, which the bank may ask you, for example. ’How much do you
need?’, ‘What do you need the loan for?’ ‘How long do you want the loan for?’,
‘When do you plan to repay the loan?’, ‘How do you plan to repay the loan?’
5. Be prepared to talk about
risk. The bank will want to know what you would do if you no longer have
the means through which you have told them you will repay the loan. For
example, if you no longer have a job.
6. Get a customer of the bank
to introduce you: Before you decide to talk to a bank directly, see if you
can get a friend or colleague who is a good customer of the bank to give you a
good referral. Banks are usually more favourable to people who have been
introduced to them by their best customers.
7. Don’t Appear Desperate for
the Loan. Pushing the loan officer may lead to your loan application being
rejected. Remember, loan officers cannot give out loans until they have the
right documentation and approvals. Make sure that there are no delays on your
end by providing all the documents you have been asked for.
8. Be Patient: The first loan
is usually the hardest to get. Banks prefer to lend to people who have borrowed
before and repaid. However, this does not mean that they do not give loans to
first timers.
A personal loan may help you take care of your immediate personal
needs. Talk to a bank to see how they can help you.
This has been courtesy Keystone Bank as part of The Bankers Committee
Financial Literacy Public Enlightenment Programme brought to you by The Bankers
Committee, comprising all the commercial banks in Nigeria and the Central Bank
of Nigeria, CBN.
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