Borrowing a small amount of money from the bank gives you financial leverage to meet various needs, for example renovating your home, paying for an education or meeting unexpected medical expenses. The amount of money a bank is willing to lend you will be based on your credit rating, your financial earnings and your history with the institution.
Talk to a loan officer at your personal bank. You already have a relationship with the lender, and you may qualify for special customer rates and terms. Options can include a personal line of credit, a short-term loan, a home equity line of credit or a bank credit card. If the money is for something specific, like a car loan or home improvement, the bank might have loan programs geared toward these types of purchases.
Gather your most recent pay stubs, bank statements and tax returns. You'll need these to fill out a loan application with the bank. The lender will ask questions about where you work, what you earn and what kind of debt you carry. The bank will also run a credit check to determine your creditworthiness. During the application review process, you might be asked to verify information or provide additional details about yourself and your financial picture. The more money you ask to borrow, the more rigorous the application and review process.
Read through all of the loan agreement terms once you're offered a loan. Some banks withdraw loan payments directly from your account or assess pre-payment penalties if you repay the loan early. Ask for explanations of anything you don't understand.
Comparison shop the terms and rates your bank offers with the bank's competitors. Small neighborhood banks often specialize in small, short-term loans. You might find a better deal elsewhere, or have something in hand to negotiate a better package with your own banker.
If you're borrowing money to launch or support a small business venture, consult your local branch of the U.S. Small Business Administration. You may qualify for one of a number of loan programs designed specifically for small-business owners.
Be wary of lenders that offer payday loans or other high-interest products. If you have concerns about the reputation of a bank, consult your local Better Business Bureau for more information.
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