Filing Your Federal Loan Application

Filing your federal loan application can be a daunting process. There are more than a hundred federal loans available to individuals and small businesses, and the loans are administered through numerous federal agencies, ranging from the the U.S. Department of Housing and Urban Development to the Small Business Administration. A few simple tips for filing your federal loan application can make this process easier. It's worth taking the trouble as federal loans often come with favorable interest rates or offer a source of borrowing for those who might not qualify for loans through conventional lending sources.

Know The Loan You Need

Filing your federal loan application is a time-consuming process even under the best circumstances. You can cut down the time you spend filing your federal loan application by beginning the process with the right loan for your needs. Prospective borrowers can find information on federal loans through the by visiting www.govloans.gov. There you'll also find links to specific information about various federal loans and email addresses for points of contact. As an example, government sources of small business loans are different for disaster recovery than for start-up financing. Don't waste your time in one government agency when you need to be working with another.

Stay Local If Possible

Many federal loans are administered through the private sector. Some student loans, some small business loans, and many home loans are backed by the federal government but offered through local banks. Because of government backing, the local institutions often are able to offer more competitive rates for these loans. When filing your federal loan application with a local lender who knows you, you have access to on-the-spot advice.

Have Your Documentation Ready

When filing your federal loan application, you are going to need certain standard documentation regardless of which loan program you're attempting to access. This documentation can include:

  • Income tax returns - Any lender, whether working in the private sector or directly with the government, will expect to see three years of income verification. Your federal income tax return is the most commonly used document for this.
  • Bank or investment statements - When filing your federal loan application, your savings, checking and investment accounts will be factored in. You want to paint the best financial picture of yourself that you can. Your bank or investment statements show when money was deposited to verify you were not loaned the funds for purposes of loan qualification.
  • Terms and status of existing loans - Your ability to borrow is based on your income and assets versus your obligations. Borrowers will expect documentation of existing loans, the payment amount and the payoff date.

Develop Relationships

Whether working with a lender in your town or by email with a federal program, it is always wise to develop positive relationships when filing your federal loan application. Gathering the required information and filling out the forms can wear on your patience. Remember, that person with whom you are dealing deals with frustrated borrowers like you every day. Lending is a science, but it also is a relationship business.

Be Thorough and Honest

Save your time and the time of your lender when filing your federal loan application. Do it right the first time so you don't have to do it a second or third time. Be honest. The lender wants to lend to you. It's their job to make loans to qualified borrowers. There are many programs available to help those who might not normally qualify, but misrepresenting your ability to pay or your financial condition is a quick road to not getting your federal loan.


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