Affordability to pay back the loan


Can you actually afford to pay back this loan? It does not matter how much it is, the question is always can you really afford in your budget to pay back this loan? So remember that they will work out how much you are going to pay every single month. They use what is called the prime landing rate interest rate to be able to determine whether you would even be able to pay back that alone. If in your budget it shows that you are over committed, so in short you may have other things that you are paying for, it actually shows the money lender that you may not be able to pay for this loan. 


If the amount is more than thirty percent 30% of your income, then they will not give you that loan. The reason to this is simply because it means this type of loan or repayment on this loan would become disastrous to your finances. Then the assessment that they do is what is called a credit check and basically what a credit check is, they check credit score on the credit you have. So is basically a report to see whether or not good credit rating in your past or any other credit commitments that you may have. 

How are you managing those credit commitments? How well are you doing in paying back when you pay back and the minimum monthly amount of money to pay back if you have things like default. The things like missing payments, if you have things like accounts that you stop or probably stopped paying, that really does play a big role in showing the credit agreement that you want to go into. Now, these two assessments are applicable for both a home loan and a personal loan, probably even more on a personal loan. Simply because remember the money lender, what they want is to get their money as quickly as possible, because this is the type of loan that is unsecured. 










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