Applying for a personal loan can be intimidating at times. For the most part, you’re confident that your loan would be approved because your credit score is good. On the other hand, you are still uncertain since you do not know the inner workings of a lending company.
The truth is, your second thought may have some weight to it after all! Credit scores aren’t just a lending companies’ sole basis for personal loan approvals. There used to be a time when it was much easier to obtain their “thumbs up,” but nowadays, other factors may come into play once the evaluation period begins.
If you’re still not convinced, perhaps the following pointers may give you an idea of what these other important factors are.
Your Past Debts
Yes, your current lender would be able to see your past debts as well!
Now, you may argue that you’re already paying them off little by little and that you are almost done with them; however, you must realize that some loaning companies are strict in this regard as well. They may even require you to pay off all your past debts first before applying for a new personal loan.
Your Other Loan Applications
This is another thing that you have to be cautious about: avoid applying for multiple loans. One of them may find out about this, and you might be flagged as a con artist! Just take it one at a time and wait for your first loan application to be rejected first before deciding to jump and apply in another.
Your Current Income
Your credit score isn’t just their main source of information. They may also ask you about your current income at work.
While this may seem pervasive, loaning companies are just vigilant about their borrower’s capability to pay off the loan. If your income isn’t enough to pay off what you’ve borrowed, even on an installment basis, your chances of getting approved may drastically go down.
Your Work History and Career Path
The financial company may want to ask about your work history. Have you ever been fired before? How long did you last at your past job? What is your standing at your current work? Are you planning to stay at that job for a very long time? How stable do you think your current job is?
These questions would be their basis on whether or not you may be capable of paying for the borrowed amount. Having a stable job may raise your chances of getting a loan approval!
Your Collateral, If Any
If you do not meet any of the criteria above, then the lender may still give you a chance; however, they might require collateral from you. This could come in many forms, may it be a valuable item, an asset, or even your property, depending on the amount of money they’ll lend you.
Aside from your credit score, there are still other important factors that you should consider before applying for a personal loan. If you need to secure your current job, settle your past debts, and come up with a collateral, then, by all means, go for it! Remember, your chances of getting approval would depend on how prepared you are and how secure are your income is to pay off the loan.
Are you looking for installment loans in Memphis, TN? Look no further than Magnolia Finance Co. We are a finance company with years of experience providing same-day loans and personal loans. Contact us for more information about all our loans and services.