Banks have taken major strides to bridge this gap over the past 10 years. They have diversity focused mandates to eliminate prejudicial lending decisions, and centralized approval offices to further displace the decision-maker from the client to help eliminate these types of conclusions, and possible discrimination. Most banks are in a marathon to brand themselves as trustworthy advisors, ready to serve you as quickly as possible without compromising your privacy. They truly want to replace the slogan “It’s who you know,” with, “It’s what bank you know.” They prefer to be identified as a lean machine with a great team rather than a few good people working for a company who genuinely want to help you.

Because of this focus by the major banks, coupled with consideration to serve their clients more efficiently and cost effectively, the centralized approval process was developed and continues to be fine tuned as the new century evolves. There are a few facts we need to accept when applying for money in this modern age of lending:

One) It doesn’t matter what branch you apply at. Most of the big banks have their branches send loan applications to the same place for review and approvals. If you don’t like the decision the first branch gave you and you think you’ll go to another one of your banks branches to reapply successfully, you’re mistaken. The second application would be routed through the same approval judgment process; possibly even to the same person who would have concerns as to why you are reapplying with another branch. You are able to, however, apply at a completely different bank with a fresh start, as they may not have a file on you.

Two) Going prepared means you have a better understanding of your own needs, and how to best present them to the bank. Lenders value a prepared applicant as it saves them time, gives them greater credibility and they will find they are in a position to represent your needs clearly to their centralized approval center.

Three) because centralized approval centers exist, built around an electronic application delivery process, heavy emphasis is placed on the results of your credit Bureau report. It should be your priority to review all the reports available on your, and confirmed the information is in fact about you, and is accurate before you apply for a loan.

Now that we accept banking isn’t as much about who you know as it is what they know about you that influences the approval process, let’s consider for a moment that we have a greater influence now than we ever have before or the information they review to determine approvals. We have discovered that debt servicing and our credit bureaus pretty much account for the majority of their decision. If we have the cash available to service the monthly loan payments, and we’re not exceeding the cap TDS and GDS ratios we’re almost there! All we have to do is ensure our repayment history with other creditors is consistently satisfactory, or have a good reason as to why it fails the test.

If nothing else remember this about borrowing money

Remember one simple fact over all others: your credit Bureau report is a reflection of your payment habits. It is this financial fingerprint that can’t be rubbed out just with wishful thinking. Keep your credit profile information current, accurate and clean of any negative items at all times.

Use only enough credit to serve your needs, no more. Stay away from applying for credit cards that you don’t need, and regularly review your credit report at least once a year to ensure it remains accurate and up-to-date each year. This is a must do before you apply for a loan. This practice of continually maintaining the perception of how you are seen is in your direct control as is the information contained on your credit report. Your credit Bureau report provides a lot of credit decision for your application, and could be the strongest influence affecting your success or failure in getting approved.

Furthermore, lenders can lend a piece of the private loan(s) by signing into their Prosper account and scrolling through the different borrowers and the borrowers reasons for needing a loan.

The Interest rate is variable depending on the category of the loan and the risk level of the borrower.

This is very effective for all parties because borrowers and lenders can create notes in small or large loans, depending the risk assessment they define by their own standards and not the standards of a typical lender using the known credit reporting agencies (usually Experion, Equifax, and TransUnion).

A perfect example of a Private loan granted (approved) using the Prosper web site. The lender reads all of the submissions and requests by the borrowers. They can lend a borrower who needs money for their small the solar-power panel sales and repair. They agree to lend the money to the small business owner littt le chunks at a time.

It’s best not to lend money or borrow money with friends (or family). If some friends or family members ask to borrow money I would politely decline, unless they have some form of rock solid security to offer you.

Friends often make deals with friends to borrow money on items and repay them when they can. These are informal agreements, such as

“You keep my favorite fishing pole for $50. If I don’t pay within six months you can keep or sell the pole.”

Of all the possible ways to do a secure transaction this may be the easiest. All you need is a friend with money, who is willing to lend, and some item you’re willing to give to them to hold as security. The beauty of this arrangement is that is all informal and it’s all up to you and your friend. It can be done with a handshake and an agreement.

The major advantage to this way of doing things is that it is so very fast and easy. The main disadvantage to this way of doing things is that it can easily wind up as a model mess and a lost friendship. One important warning is that just because an agreement is informal does not necessarily mean that it is not a binding and legal agreement.

Contracts over $500, or that deal with real estate, generally have to be in writing. However, oral contracts for less than that amount are also valid and binding. But, with nothing in writing, ownership of the property and the terms and conditions for the return of the property can become confused and forgotten.

When nobody else will help you, often your family and friends will. Your responsibility is simply to make sure you pay back the loan in full and on time. Furthermore, you should pay them a reasonable APR on the loan.

Think about how you will repay a family loan. Regular creditors under the FDCA (Fair Debt Collection Act) are required to follow many different procedures and rules about how they can contact you regarding past-due loans. The Fair Debt Collection Act applies to the conduct of bill collectors and regulates when they can call and also spells out defenses and rights of the consumers.

Nothing limits Uncle Charlie from mentioning the loan every time you see him. You should know going in whether or not you want this type of pressure going in.

You may decide a cash advance from a credit card at a high interest rate is a much better deal than possible grief and embarrassment.

If you decide to go through with a loan from family or friends there are things to consider. To be successful, these loans should be written down and documented. They should allow the lender to receive a reasonable return on their money. This may introduce an element of arm’s-length dealing into a friendship or family relationship that is just too uncomfortable for you.

An agreement over an unsecured personal loan can be written up as a promissory note. Promissory notes are available online and where office forms are sold. They are basic forms that spell out how much the loan is for, when it is due, and what the interest rate is. Never borrow money from family members you are not sure you can repay.

Even more so than in commercial loans, the downside of not being able to pay the loan back needs to be considered since there is usually more than just money riding on the line with family loans.

Although these loans have these perils they also have several plus factors. Family loans are often the source of money that makes many of good things in life possible for many people. When the process works, it can work so well that the many successful loans between family members pass without notice.

For example, many down payments for first-time house are loans from parents. Also, many college and graduate educations are pay for with loans directly or indirectly from grandparents.

In a loan arrangement, the loan may be secured or unsecured. Secured loans have some sort of collateral behind them that gives the lender confidence that the borrow can pay it back. Unsecured loans do not have any collateral and are only a promise to pay.

Pawning is a secured loan. When people pawn things the give an item of the value to the pawn broker who holds item as security for their loan. If they don’t pay, the pawn broker takes their item and sells it to recover the cost of the loan. Borrowing money is a stressful experience.

It means offering up something of value in return for a cash advance or loan. Something of value can be collateral, such as your car or house, or simply your good name in return for the loan of the money. This can be a very valuable strategy for dealing with cash crunches, but it can also be a roller coaster.

Consumer lending is a highly regulated activity. The federal government and individual states have long recognized the inequalities of position between borrower’s and lenders. Many different laws have been passed to regulate the process and to protect customers when they borrowed money. The one law that consumers should be most aware of us is the truth in lending act or consumer credit protection act.

The truth in lending law basically requires the lenders act really disclose all the terms all the loan. There are two great resources for understanding laws that protect consumers. One is the Federal Trade Commission web site at www.FTC.gov. The other is the Federal Reserve web site at www.FederalReserve.gov/pubs/consumerhdbk, which has a consumer guide to credit loss that is very helpful.

Borrowing money is not something limited to just banks and credit unions though. Many of the places that may be the consumer’s best source for borrowed money may be mortgage companies or consumer finance companies. In addition, consumers may borrow against life-insurance and 401(k) plans.

In “the new world order” Shakespeare’s warning is falling on deaf ears.

“Pss….can I pawn this quill pen”

Here is a good tip from Bankrate that I saw recently on their site:

I am constantly inundated with e-mails from people who co-sign for girlfriends, boyfriends, brothers, sisters, even co-workers, and all these e-mails tell unhappy tales — the person stopped making payments, ran off with the vehicle or otherwise left the co-signer holding the bag.

This is not uncommon in any way shape or form. I have personally had friends and relatives whom I lent money to never repay. The family lines were strained and stay strained for years to come and frankly, in one of my personal cases, the relationship is still damaged today.

I would now say no to any family member or friend who asked me to lend them money or co-sign a loan for them. It’s just not worth it, and if you are in a position whereby one of your family members or close friends is asking for a loan or asking you to co-sign a loan – don’t do it.

If they are really good friends or close family members (true friends) they will not hold it against you for long. They shouldn’t hold it against you at all, and if they do, let it go and be gone.

What were they thinking hitting you up as a co-signer anyway!

One note: that is the exception when we lend money or co-sign a loan for one of our children. Even then I would be very careful not to end up with my own credit rating being dragged through the mud. Our children need to learn fiscal responsibility too.