Paperwork from a loan.

If you are in the need of an emergency loan, there will be little time to prep for it. You have to just apply and hope for the best. If you are looking for a loan and time is not an issue however, there are some things that you can do to make the result better.

Take a look at some simple things that you can do before you apply for a loan. Things that can result in lower interest, lower payments and an easier loan process.

First, Check Your Credit

The very first thing that you should do when considering a new loan is to check that credit report. Ideally, you should really be continually monitoring it. There really is no reason not to these days with free services like Credit Karma and Credit Sesame. If you have not been doing so though, you need to check that report.

When you check your credit report, examine it carefully looking for anything that is not right. This could be anything really. late payments that you did not earn, accounts that are not years and even civil judgments put on your report mistakenly.

When you see errors, report them to the bureau. You will need to do this in writing or by filling out a dispute form at the credit bureaus website. Once you have done this, the bureau has 30 days to investigate the matter. Information that can not be proven will then be removed.

Because it takes 30 days just to do the investigation, you need to check your credit at least 60 days in advance of getting a loan so that there is time to get the incorrect data removed from your report before you apply for more credit.

Second, Pay Down Your Balances

If possible, you need to pay down your credit card balances. Your ideal credit card balance should be no more than 30 percent of your available credit. That is not to say that it is all or nothing though. The closer you get to that level, the higher your score gets.

So, obviously paying off thousands of dollars in a few months will not be possible for most people. If however you can pay several hundred dollars and get your balances down 5 or 10 percent, this would be very much worth doing. That could yield you 10 or even 20 points on your score, depending on where you stand at this point.

Third, Get Your Down Payment Together

Depending on the loan that you will be applying for, a down payment could be a very big deal.

With home loans, 20 percent is the pinnacle. If you can come up with that amount, you can avoid private mortgage insurance which can save an easy 200 to 300 dollars a month on the average mortgage.

Car loans can also benefit greatly from a big down payment. The more that you put down, the less risky the loan is to a lender and the lower the interest rate you will pay. 10 percent is a great starting point for an auto loan but if you can get closer to 20 percent, that would be even better. 20 percent would cover your first years auto depreciation, making the loan much more appealing to a lender.

Fourth, Figure Out What You Can Afford

Chances are good that you will get offered a loan that is more than you can actually afford. Do not get in over your head.

Instead, you need to take a look at your budget and determine what kind of payment that you can fit into this budget. Then, let that payment set how much you can spend. Set the type of house, car or whatever you intend to shop on based on the amount that you can afford to pay each month.

When determining the amount that you can afford each month, be honest. You can strip your budget to the bone for a few months but not for a few years. Make sure that the potential payment fits in comfortably.

Fifth, Get Your Paperwork Together

Most loans, besides emergency loans, are going to require some paperwork.

For a standard personal or auto loan, you may need pay stubs and even tax returns. Get them ready before you go in to avoid any delays in financing.

Home loans are another animal altogether, You will need pay stubs, tax returns, bank records and more. Get with a mortgage loan processor early on to determine what you will need and begin collecting it early. The more prepared you are, the quicker and easier your loan process will be.