Personal loans are loans granted to a person by a financial lending institution. The repayment of the loan is agreed upon by the lender and recipient upon approval of the loan. These loans are different than vehicle or home loans because the amount borrowed is generally much lower. When applying for a personal loan, the financial institution will look into several different factors to decide if a person qualifies. The lender will considers a persons credit score, unsecured debt, current bills, income, and how much the asking amount is for.
A persons credit score is a number lenders will use for any loan. This number fluctuates when businesses report the repayment status of financial obligations. Medical bills, credit cards, living expenses, and other bills a person may have will report to the credit score. When a person repays on time without any delinquencies or if they are delinquent on payment it will reflect. If a person files bankruptcy, it will reflect in the credit score report. The lending institutions generally require the credit score to be a certain number before they even consider a loan granted. The credit score will also determine if the person needs a cosigner for the loan.
Unsecured debt is any debt with a fluctuating interest rate. This could qualify as credit cards or balloon payments on a vehicle or house loan. Unsecured debts are a dangerous 汽車貸款 factor in the equation because they are at risk of getting out of control and could prevent the lender from receiving their monthly payment. Before applying for a personal loan, it is best to minimize as much unsecured debt as possible. When the debt is minimized it will increase your credit score and reduce a persons monthly budget giving them a better chance of being approved for the loan requested.
Lender’s take into consideration a persons current living expenses. These living expenses include monthly rent or house payment, utilities, food, vehicle payment, insurance, and gas. All of these expenses are required to live on a daily basis. The lender will take into consideration if there is roommates or if the person pays the entirety. Lender’s also prefer to see these expenses combined leave the person with a certain percentage of your income free to ensure the loan repayment will be done successfully. If the living expenses are a majority of the income, it is best the borrower try and find a supplemental job to offset the formula the lender uses to determine if they qualify for a loan.
A person must bring proof of income when applying for a loan. Generally the lender will request a minimum of three months proof. The lender will consider the longevity at the employment position, how much a person makes hourly or salary, and if there are any court ordered garnishments taken out of the checks. The lender will calculate your income into the equation and also take into consideration if a person already has some money in the bank. The lender likes to a there is some money saved up for emergencies. With a saving account built up there is a less likely chance of a person defaulting on the loan.
Once the information is presented to the lender it will be sent over to the underwriter’s department to make the final determination if the person qualifies. If needed, the underwriter’s will then request any additional information. Upon approval is when the person will sign the financial contract with the lender and the money is received. At anytime during the signing process and after the borrower is welcome to call the financial institution if they have questions.