What Determines Your Eligibility for a Loan- Bank Loan Details

loan and finance info

loan and finance info

You many never have resorted to seeking a bank loan thanks to an easy and manageable flow of cash from a solid paycheck and believe me that this is quite admirable, today is not a certainty and we must think about the future. You are not growing younger and old age is assured for each and every one, so how will your retirement life be? While your retirement benefits may not leave you begging on the streets, have you also stopped to consider how the economy may derail in the years to come if it’s already worrying you today.

So you might need a loan

While your retirement should spell a reward from your most productive years, without the best retirement plan your retirement might end up becoming absolute punishment. You don’t want that and nobody would but how secure is your retirement based on your retirement benefits. Will you still manage to pursue your postponed hobbies, will you be able to travel and be merry or will you end up becoming a burden to your loved ones. Real estate investment is one of the best routes you can confidently pursue to help guarantee a fulfilled retirement. Again while trying to budget for the daily expenses, parenting and education, your paycheck will probably be too occupied to sustain further investments and this is where you are most likely to think of a bank loan, but do you stand a chance?

Loan Eligibility

The magnitude of the amount of desperate loan applicants in banks all over the world is sad, and the fact remains that the highest percentages of these applicants don’t have the qualifications required. With the current financial crisis looming today qualifying for a loan has become quite a daunting task. To make everything a lot easier here’s what will determine whether you stand a chance for a loan grant.

Income and assets-Most lenders will consider your monthly earnings and personal assets to determine your repayment ability. Often your lender will require that you be in a position to use 28-44% of your paycheck to service your loan. Bonuses and other sources of income including investment assets for the last two years and bank statement are also considered along with factors such as insurance, tax maintenance and other expenses may be considered towards the decision for your loan approval.

Employment Stability– If you are one of those people who keeps changing employment then this will be quite a downer when you need a loan. Lenders consider you eligible if you have at least two years employment at your current job although this is not always an absolute requirement.

Credit history– Lenders tend to scrutinize a borrower’s credit file requested from the credit bureaus which is meant to offer a more complete perception on their repayment ability. The credit history will include utility bills and other payments as outstanding debts to offset the borrower’s income. If you pay your bills on time or have large outstanding debts, then this might highly compromise on your eligibility.