Factors Affecting Consumer Loan Approval

Thursday, July 6, 2017
Posted by admin under Consumer Loans 

Factors Affecting Consumer Loan Approvals

Considering a consumer loan soon? It pays to know how decisions are made by your lender. Rural loans may have different criteria than a consumer loan. While geographic location has impact, so too does the type of loan you need. Below are some of the possible criteria banks and finance companies may use to weigh your creditworthiness.

Credit score. Most of us are aware this figure is floating somewhere out there on each of us. Many of us do not know how to access the number and what impacts the score. It pays to do your research and keep your numbers as high as possible. Your overall score may affect whether you will be granted credit by an institution and what interest rate you may be offered.

Employment. Creditors may look at your current and past employment history to consider how great a risk you are for paying them back.

Residence stability. Creditors may weigh your application partly based on how long you have lived in your current residence. This is a risk assessment factor that has far less to do with your location than your length of residence in any location.

Income. Creditors will often look at your income to debt ratio to see if you can afford another loan and they can reasonably expect you will pay them back as agreed.

Other factors can also impact your application for consumer loans in Vermilion County, even though they may be subjective on the part of the lender. Are you known to the lender? Are you recognized in the community? What is the purpose of the loan? A creditor will view a request for credit from a 19-year-old for stereo equipment differently from a request for a small business loan for computer equipment which will increase business and help the consumer repay the loan. This list outlines some of the factors that may influence your consumer loan approval, interest rate and terms offered on your next loan application.

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