Everyone is in need of a loan owing to multitudes of purposes, such as buying a new car or a new house. However, nowadays, it is not an easy task to get your loan approved. All thanks to the global financial problems, the lenders have become stricter now. You need to be completely ready with all your documents in hand in order to get the approval.
Pre-requisites that a lender expects prior to approving a loan application
- Full verification of income source- Gone are those days when your loans were being approved without much verification or documentation. Now lenders feel the strong need to know all about your income sources so that they can determine that whether you have the capability to pay for the loan or not. They can also ask you for any proof of income including any alimony or two recent years of tax returns.
- Preference of good credit history –Lenders will surely look up for your credit score before approving your loan. You can also avail certain benefits such as lower interest rates if you have a credit score of 740 or more. The customers with lower credit score will have to pay larger down payments to keep a check on bad credits. In addition to all this, the lenders will have a word with the customers with low credit history and will suggest them some ways to improve it.
- Employment affirmation – Not only your pay slips or tax returns slips, lenders will also prefer to verify that you are still employed and can pay for the loan. For that purpose, they can also call your employer. Even if you have changed your job, they can call your previous employer to verify the same. In case, you are self-employed or running your own business, you need to show up your business paper to verify your income.
Thus, be prepared with all your documents before visiting any lender to prevent further heartaches. The people with Bad Credit History must start working on it in order to get convenient loan approval.
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