Proper Approach to Loan Shopping

"Getting a loan is like shopping for jeans."  That's what the first real estate agent I had regular contact with said to me.  "You go around to see what appeals to you.  You try them on.  If they don't fit, move on and try the next pair," she said.

This is a valuable perspective to have if you are in the market for a loan.  Whether you are looking for a home loan, an auto loan, or just want to refinance your mortgage, remember that you are "shopping for jeans".  Far too often, people view a loan as something that they have to be deemed worthy in order to obtain.  Subsequently, they are happy with whatever scraps a loan officer chooses to throw to them.  This is the wrong mentality.

Loan Officers Want to Give You Money

Financial institutions that offer loans make their money from the interest you pay.  If they give no loans, they make no money.  Therefore, it is in their interest to try their best to find a loan for you.  If one place says no, move on and try another.  There are a multitude of institutions waiting to throw money at you.

The same is true about the conditions and amount of a loan.  You may or may not have an idea of the exact amount you are looking for in your loan but you do know what is too little.  A loan that is too small will do you no good.  Move on.  Are the interest rates too high?  Move on.  Don’t be afraid to walk away.

You are the Alpha, Not the Loan Officer

The fact that loan shopping is structured in this manner means that you are the one in the position of power.  While going into a bank, looking for a loan can be intimidating remember that they are trying to sell to you.  The loan maybe for something very important to you but the fact remains that you can walk away at anytime.  There are too many institutions fighting to give you money for you to just "take what you can get".  With the rise of online lending, you will almost certainly find a loan that suits you.  Don't settle for scraps.  Find the pair of jeans that fit you just right and take them home.