Getting a loan is not easy as you have to convince the bank that you are capable of paying off your loan. They will be reviewing your loan applications by taking into account many factors as they want to minimize as much risks as possible before approving your new loan. Some lenders will scrutinize your credit score, job status, assets and overall credit worthiness. Depending on the lender and your risk, there are other variables that are often considered. The following are some areas that installment loans network, a short term loan comparison website indicated most lenders scrutinize when reviewing your loan application.
Length of Time on the Job
Having a stable job is important as it is the proof that you can manage the monthly repayment. Many banks have minimum requirements that you must be employed for the past 6 months. If you frequently change jobs, your application may get rejected because they will see you as a borrower in the high risk category. If you just started on a new job, you might want to wait until 6 months before applying for the loan.
Working with a large company that give you paycheck every month can increase your chances of getting approved for the loan. If you receive cash instead of paycheck for salary, it may be difficult for you to get a loan approval because you cannot come up with any proof to prove you have adequate salary to make repayment every month. Therefore, if you are planning to get a loan, make sure the job you do will pay you the salary in a way that can be recorded for example direct deposit into your bank account or paycheck.
While age itself is not a factor, being able to document your income in many situations will be a variable. Most retired borrowers survive on fixed income but your loan can be rejected if the fixed income is much lower than what you used to earn. Young borrowers in their 20s should have no problem in getting a loan approval if they can prove that they have enough of a monthly to cover for the repayments any of their current debts.
Owning a Home
Taking a loan or mortgage can cause your credit score to drop slightly but this should not be something to worry about. As long as you make the repayment on time, you will be able to build up your credit rating in as little as 6 months. Getting a loan can help you to achieve a good credit score if you are responsible and always pay back on time.
In conclusion, you must have the capability to meet all the requirements prior to applying for a loan. You must remember to always spend time shopping around and compare the interest rates from different creditors before submitting the loan application.