How does a US bank decide whether to give you a loan?

Фото: Depositphotos

If you want to borrow money, and not to buy a house or car, your debt is not guaranteed, so the banks approach these solutions more carefully.

In such cases, banks consider many different criteria that affect their final verdict.

Data on what creditors are primarily paying attention to before lending money to someone has been collected by the publication. Go Banking Rates.

Credit rating

This is a very important factor, so make sure it is as high as possible. Check for debts or arrears on your loans and pay them as soon as possible. It is also worth asking the bank to increase the limit on your credit cards - all this will have a positive effect on your credit utilization level, and therefore on your credit rating.

Income at the moment

Lenders will definitely pay attention to your current source of income. In most cases, they would like to see your monthly debt not exceed 43% of monthly income. In addition, they will pay attention to your other monthly payments: alimony, etc.

Labor history

The lender would like to see a stable income and a solid work history. Borrowers who change jobs frequently or are self-employed are more likely to be denied and must provide stronger proof of their income. A good work history doesn't mean you've stayed with the same company for decades—the lender wants to see that you've consistently stayed in the same line of work.

Monthly installment

This is a contribution that you will have to pay a monthly loan, including interest and other payments. This amount is important to know both the lender and the borrower, it will help them both to evaluate whether the borrower can pay this amount with his monthly budget.

History of loans

In addition to the credit rating, the bank will check how you returned the previous loans. Delay and debt in this case will play a negative role for you. Debts can remain in your history for up to 7 years, which will lower your credit rating and worsen your credit history. If you really had a delay, you can contact the previous creditor with a letter asking you to remove information about past debts from your history.

Other factors

Some lenders also pay attention to the purpose of your loan, comparing the cost of the service or product that you intend to purchase, and the requested loan amount. In addition, some banks may pay attention to your age, length of residence in the region, etc.

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