Things to Consider When Applying For Second Look Loans
Most of the large banks in the USA have been giving out lesser loans owing to their tough borrowing rules. These borrowing standards have become even more stringent since the recent financial crisis.
A big help to deserving applicants whose loan applications get rejected is the second look review. Borrowers can take the help of second look loans because the amount of respite some second look programs offer is unrivaled. These programs are basically meant to evaluate the discarded loan applications with the help of a review process so that the loan gets approved.
Yet the process is not as simple as it sounds. There are chances that a second look loan application might get rejected. In order to avoid such an uncalled-for situation, borrowers must consider the following points when they apply for second look loans.
- Some banks in the United States have second-look programs that employ out-of-the-way efforts to approve loans for companies. The main point that these banks stress upon is that the company in question should have regained profitability after hitting a rocky patch in the past. This kind of rack record boosts the company’s chances for second-look loans considerably. Hence if a company has a positive track record of dealing with bankruptcy in the past, they can consider applying for these loans for they have a greater chance of approval.
- Another interesting thing to consider while applying for these loans is that borrowers can request for a review. This is because some banks allow borrowers to request for a review of the previously rejected loan application. These reviews are automatically triggered for despised loan applications.Sometimes applications fall just outside the lending standards of a bank. In such cases also lenders allow borrowers to request a review of the rejected application.
- While applying for a loan one must consider a review of the credit history. Both personal and business credit histories must be evaluated and these should be got in order. It is also advisable to request for credit reports from major credit reporting agencies. In case an error is marked, a correction request must be sent across to the agency so that the credit scores get fixed. Furthermore, if the agency refuses to correct the report, a credit dispute report can be filed following which the score must be checked again.
- Considering smaller regional commercial banks for a loan is a good idea. This is because they offer a better second look loan approval rate than large, national commercial banks. Credit unions and other non-bank institutions in the locality also hold a fair chance. Moreover, one can consult a loan officer within the organization for a better idea.
Despite all the above steps, a loan applicant must be ready with a business plan. This plan must be clearly described to the loan officer at the financial institution that one approaches.
Sometimes preparing a presentation with an executive summary is considerable. This can be presented alongside the application to the loan officer while applying for a second look loan. Thus being crisp and succinct and is the best plan while considering a second look loan.