Loans are the ideal financial solution for those who are seeking the immediate or large amount of funds. In fact, depending on your financial requirement, you can easily opt for a loan type pertinent to that particular situation.
But while it may be easy to apply for a loan, getting an approval on your application is another factor. Lenders and banking institutes who offer the different types of loans often refer to certain features before giving one’s approval for the application.
Given below are some of the loan aspects that are taken into consideration for most loan approvals:
Credit history: Most lending and banking institutes would prefer applicants who have clean financial habits. A credit score will indicate this financial health. Normally, a credit score of 800 and above is considered as the best score. The score in between 600 to 800 is considered good. Any credit score below that level will increase the chances of rejection on the loan application. If you already have a good credit score, you can not only get a good loan rate, but also a faster loan processing and fewer verification check.
Occupation: Banks are more preferential to occupations that are stable. Certain occupation profiles such as government employees, blue chip companies and doctors are more likely to have an approval on their approvals for bank loans. In addition to these profiles, chartered accountants, engineers and lawyers are more likely to get a loan approval. However, individuals who are working in private companies and self – employed companies will get the lowest rates. Banks are particular to this factor as the repayment capacity depends on the income of the person. A stable job will ensure that the income earned by the applicant will be continuous and without any delay.
Age: Age is another criterion that lending banks will look at before giving out different types of loans. In most cases, applicants between the age group of 30 to 50 years are most preferred, as they are considered more financially stable. After all, these individuals also have a decent number of working years left to repay back the borrowed funds. Any applicant with age above that will have a high chance of loan rejection.
Work experience: Most lending institutes request about your work experience, in a particular company. This is because the longer the employment years you serve, the more points you will earn with the lending institute. This shows stability in your work, especially if you are at the peak of your working years.
Relationship with the Bank: The older the relationship with the bank, the higher are the chances of getting an approval on your applications for bank loans. Most of these lending institutes value familiar customers, as they are aware of their financial past. A person who has had a relationship with the bank for more than 10 years will be preferred over the one with no relationship.