3 Factors Lenders Look at When Considering a Loan Application

When applying for an auto loan or personal loan, you want to put your very best foot forward. However, this is challenging and tricky to do if you are uncertain what the lender is considering. You will know that they generally have to look at certain things to determine whether to comply with you or not. If you are planning to apply from a licensed money lender singapore, here are some of the important things that you should be prepare of.

Credit Score

Most lenders look at your credit history and score, as it gives them an idea of how you handle borrowed money. A poor credit history indicates a higher risk of default. It discourages many lenders, as there is a chance they won’t pay you back exactly what they gave you. Lenders often don’t disclose minimum physical ratings, in part because they look at your score in combination with the variables listed below.

Salary and Employment

Your income and work are the essential prerequisites that lenders need to verify if you apply for a loan. Lenders need to know if you can repay everything you borrow, so they need to determine that you have a reasonable and steady income. Income requirements change depending on the loan size, but in general, if you borrow more money, lenders should look for a higher income to make sure you can keep up with payments.

Collateral Value

Collateral is something that you agree to give to the lender if you are unable to meet your loan obligations. Loans that include collateral are called secured loans, while loans that do not have collateral are considered unsecured loans. Secured loans usually have lower interest rates than unsecured loans because the lender has a means of recovering your money if you fail to pay. The value of your collateral also determines how much you are allowed to borrow.