3 Quick Tips Get a Personal Loan (Hint: Treat it Like a Job Interview)

A few years back, I got a personal loan.

I did it in order to start a business and consolidate some debt I piled on from my late teenage years – including a loan for a brand spanking new car and some credit card debt.

There comes a time in just about everyone’s lives when we could use a personal loan of one form or another. However, getting a personal loan, especially in this economy, has changed quite a bit over the years. It has become much more difficult for us to be approved for various loans and banks are now usually more competitive. They have taken the stance of the ones in power and thus choose very carefully who they loan to, much like employers when they hire employees.

Skip the banks and get a low interest loan from Lending Club.

I’ve found that there are many similarities between dealing with banks and dealing with an employer or prospective employer – from interview tactics to acceptance of terms. Hopefully if you are in a situation that warrants a personal loan, these tips can help.

1. First Impressions Do Matter

When you go in for a job interview, you want to look your best and try to present yourself as best as you can both on paper and off. With banks and personal loans, you want to do the same thing, especially since the relationship can be longer than one with an employer.

The representative at the bank will be looking for any reason that might suggest you’re a bad candidate for the loan; they’ll look over your credit score history, any existing debt you have, and your income. Basically they want to know whether or not you will be able to repay the loan under their terms. If there is any shadow of a doubt, you can be sure that they will pass on giving you a loan.

For the loan that I received, I was actually turned down with my first application even though I was asking for half as much money as my second application (which was later approved). The bank told me that starting a business was risky and that they therefore wouldn’t loan to me. When I went back in with the new intent of consolidating debt as well as getting a little extra money for starting my business, they were all for the transaction because I had my new car as collateral.

You can’t predict exactly how the bank will act when going through the lending process, but you can control how prepared you are. Be ready to provide information on any collateral you have and proof of income. Show the lender that you are on the ball and know what you’re doing – it’ll increase your chances of approval.

2. Your Answers Count in an Interview

In a job interview, you are usually asked a series of questions related to the work you will be doing, your past work experience, and oftentimes even some open-ended questions that have more to do with who you are and what your personality is like.

A personal loan interview is no different. Your answers to questions like, “Why are you applying for this loan” and “How quickly do you intend to pay the loan back” matter. You obviously need to be honest but you also need to consider what the interviewer will think about your reply, and thus formulate it in a way that sends the right message.

Be cordial and answer the questions as directly as you can without giving away too much unnecessary information. The interviewer will be trying hard to “read between the lines” and find out what you might really mean, so do the best you can to give them exactly what they want and nothing more.

3. Don’t Feel Pressured by a Low-Ball Offer

At the end of a job interview, there usually comes a time in the conversation when you are given the initial terms of employment. At this point, you may even be offered a position – including a salary figure and key benefits to make the job sound more appealing. With jobs and personal loans alike, all of the terms are negotiable. If they don’t sound right, don’t take them!

In the case of my personal loan, the interest rate came back at 10%. For me, this was lower than the interest rate on the bulk of my debt so I took the deal, but had it been any closer to my car loan’s higher interest rate of 13% I would have said, “no thanks.”

Keep in mind that you are a customer of the bank. You are their source of revenue, but more importantly you are the foundation on which they operate. You have a lot more control in this situation than you might think, and if you don’t like everything about what they offer, don’t be afraid to walk away. You owe them nothing and taking a bad deal will only hurt your future. On the other hand, passing on the loan won’t hurt the banks one bit.

The economy isn’t what it used to be, and lenders, like employers are a lot more strict about who they will get involved with. If the time comes when you need a personal loan, don’t leave any room for errors whenever you can control it. Come prepared looking your best, and the bank will be happy to lend you the money you need. And if that doesn’t work, you can try other options including peer to peer lending networks like Lending Club. Find a low interest loan at LendingClub.com.

Do you have any experience applying for a personal loan? How did the process work out for you? Share your experiences in the comments below.

Jesse Michelsen is a contributor for MoneyCrashers.com and the founder of Personal Finance Firewall. There he writes about being prepared so you can take life by the horns and get everything you ever dreamed out of it.

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  1. Hey “PT”, that’s not a piercing, its a wart.

  2. Well, much like with anything else that’s financial in nature, borrowing money works out the best when you’ve planned just how to do it. Here are a few questions to reflect upon before taking out any kind of loan: Do you really need that loan, and what is it for? What kind of loan are you getting? How are you paying it back? It seems to me that many people take on loans without really thinking hard about the consequences, and that’s when they get into financial trouble.