How Lenders Decide Whether to Give You Loan or Not

By on January 2nd, 2018

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Have you ever thought “I need to find the installment loans near me and apply as soon as possible”? Well, if you need an urgent loan help, you should wear the hat of the potential lender to understand his train of thoughts and know how the lender decides whether to give a loan or not.

Keep on reading to find out about the basic things to consider before applying if the thought ”installment loans for bad credit near me” crosses your mind.

Obvious Thing: Credit Score

Of course, the first thing the lender looks at is a credit score. This three-digit number is a sort of identification whether the borrower is a responsible and conscientious payer or not. The completed application form provides the creditor with more information than you think. So, the higher your score is, the more chance of being approved you have.

Of course, your credit score isn’t a decisive factor and it’s not the guarantee of your on-time regular payments. Still, it gives the lender an overall picture of your creditworthiness and behavior.

Different lenders use different systems to work with your credit score. Therefore, if one lender rejects you, it doesn’t mean that the other lenders will refuse too.

Information the Lender Gets from Reference Agencies

There are three well-known reference agencies that provide information about people’s financial behavior. Before issuing payday and installment loans near me, lenders check out the following things:

  • The Electoral Roll or your registered address;
  • Linked addresses or all addresses you live at;
  • Public records such as court judgments, bankruptcies, etc;
  • Account information about all valid accounts for borrowing. It also includes data about your late or on-time payments;
  • Home repossessions reveal information from the Council of Mortgage Lenders about repossessed houses;
  • Financial associations contain data about people with the home you join account or who somehow participate with you in a loan;
  • Previous searches reveal organizations, credit unions, banks, and lenders, who checked out the aforementioned information about you in a year.

Your account will also contain information about any fraud against you. Therefore, such pieces of information won’t present you in a favorable light. The lender has a right not to tell you your credit score. Therefore, different inaccuracies appear. If you think that there was a misunderstanding, ask the lender what system he used to reveal a credit score and check it out.

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Other Important Factors for Lenders

All reliable lenders, who deal with the installment loans, check out the credit history. Interesting thing is that sometimes the absence of history is worse than a solid one.  If a borrower had several loans but paid them off with regular payments, he will more likely to get approval because the lender has information about his financial behavior.

So, the longer history (in specific circumstances) can contribute to loan approval.

The next thing that every lender requires is information about your income. The creditor needs to know if you will be able (at least hypothetically) to pay off the debt. In this case, you will have to present tax forms or paycheck. If your salary isn’t enough for payday installment loans near me, then a lender might offer you a secured loan. Probably, collateral will act as a guarantee of your ability to pay off the debt.

Of course, there are cases, when people don’t meet any of the aforementioned criteria. Every case is unique and one can’t predict the outcome. Don’t be desperate. Try to find a reliable lender that will be able to offer a reasonable solution and you will definitely get installment loans no credit check near me!