Before going to the Bank to apply for a loan, it is pertinent that you take some steps. The following are the steps to take before applying for a loan:

1. GET CLEAR STATEMENT OF PURPOSE FOR THE LOAN: Don’t just apply for a loan without having good reasons. Ensure that you don’t apply for more money than what you require. If the bank or your Lenders are not convinced of what you need the loan for, then your application will be denied. You must have a concrete reason for applying for the loan.

2. DETERMINE HOW MUCH YOU REALLY NEED: Take your time and list out your general costs and the cost of assets that you aim to acquire before going ahead to apply for a loan. This will indicate that you are ready for the loan. If you aim to start a business with the loan, then you must state your financial plan and how you aim to spend the money. With this, you will know how much you really need for the business, the profit the business is likely to generate and when you are likely to break even.

3. BUILD A GOOD RELATIONSHIP AND TRUST WITH THE LENDERS: It is typical of lenders to be ready to give out loans to people they know and trust. If you have identified your potential lenders, then you have to start building a relationship with them. If it is a Bank, then you have to open a bank account with them for some time before applying for the loan.

4. DETERMINE THE PERIOD OR TERM OF THE LOAN: Don’t apply for a loan when you have not determined how long you want to pay back the loan. Take your time to determine this, then you can go ahead to work towards achieving it when you finally get the loan.

5.WRITE A FEASIBILITY REPORT: You must put down a feasibility report if you need the loan for a business start-up. With this, your lenders will know that you have really taken time to research and know about the business. Without this, then your application will be denied!
If you need the loan for business expansion, then you must prepare an authentic report of the performance of your business. This will help convince your lenders that you will be able to pay back the loan

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