Nowadays, a loan is an outstanding financial product to meet short term monetary needs for a person only if they are eligible for it. Are you the one who’s thinking for taking out a loan such as to cover a medical emergency, a wedding, a holiday, to pay child’s education or to purchase any electrical appliance and gadget? So "Apply For A Loan" as it is a great way to manage variety of expenses in a one go.
The lender’s requirement for loan may vary from one to other but certain factors are always taken into consideration before approval on loan like age, income and credit history. Before getting a loan, it is advisable to familiarize yourself with some common loan requirements as well as documentation. In this blog post, we tried to touch some the common criteria that must be met for availing a loan.
Age: A loan applicant must meet the lender’s requirement of age in order to process the loan. One must consider this while applying for a loan as it tells lender about your repayment ability as well as your financial stability.
If a loan seeker is in their early twenties, he/she may not have a financial stability that lenders need. Similarly, if you are approaching over 60 years of your age, you earning potential reduce during that period. The lending institutes usually consider applicants who have age range from 21 to 60 years but every lender has different age requirement.
Monthly income: The repayment of loan is totally based upon your income. Therefore, one should pay attention to your income while planning a loan. Every lending institution has their own minimum income requirements.
A lender always considers the organization you work for while assessing your income. Moreover, lenders also consider your primary source of earning; one may still be able to qualify a loan if he/she has a secondary income source such as leasing land or rental property. This will make sure the lender that you will pay your monthly installments on time because of earning a passive source of income.
Credit history: Lenders consider your creditworthiness by reviewing your credit history of repayments and utility bills which is calibrated in the form of digits called the Credit Score. If you have a good credit score over the range of 750, it will have a positive impact on the eligibility factors that results into faster loan approval.
Debt to income ratio: The lending institution calculates your debt to income ratio by dividing all your existing debts by your total income. If your ratio comes out to be high then your application might get rejected or you will be charged with higher interest rate as high ratio increases the risk of default.
Stability of job: The other thing that lenders may consider is your work experience and employment status when you "Apply For A Loan Online" or offline to have a better understanding about your income, debt to income ratio and repayment capacity. If you are a person who switches a job on frequent basis then your application might get rejected.
Hence, it is good to make sure that all the above mentioned factors are in your checklist while availing any kind of loan.
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