Financial hiccups may pop us without notice to anyone. Most people find it difficult finding ready cash. Bank loans such as loans for emergencies and development and other projects are the favorite loans that are taken by many people. Loan policies, terms, and regulations vary depending on the bank. You must be qualified to secure a bank loan, according to your bank’s loan policies. This article discusses the factors you should consider before applying for a bank loan.
The first factor you should consider is your credit history. Most banks prefer lending people with clean financial credit score. To see if you have defaulted before, lending banks can check your financial credit score by checking from credit bureaus. The other factor worthy of consideration is the occupation of the borrower. Depending on the bank, some occupations may be preferred to see the repayment capacity. Again, self-employed people and those who work in private companies always get low scores when applying for loans. It is worth noting that a negative impression is read from a borrower who keeps switching jobs.
When applying for a bank loan, the age of the borrower must be put into consideration. The ability to repay loans is high in people who have more years to work, making them preferable by most banks. In case you are applying for a property loan, banks will consider the distance of the property and the financing branch. For a property loan to, it is not easy to approve the loan if the property is very far from the financing bank. Your banking habit will determine whether you qualify for a loan.
For your loan application to be approved, your work experience must be considered. Banks prefer lending those who have been working for a fairly long period. The other factor you should consider is the income of your spouse, if you are applying for a home loan. The income of your spouse matters when applying for a loan, especially the home loan. The repayment period also matters when applying for a bank loan. The shorter the repayment period, the more likely the bank will approve your application.
Bank loans can be approved or denied, depending on the purpose of the loan. For a home loan, it is much easier to secure a loan for repairs and maintenance than it is for land and construction. The other factor that banks consider before approving a loan request is surplus income. Lack of a surplus income would also mean than the borrower has high chances of defaulting if they lose their current jobs. The other factor that determines the loan approval is the relationship between the bank and the borrower. Old customers are banks’ favorites because banks are familiar with their financial past.