With so many different types of lending, it might be tough to know exactly what your lender is looking for whether you apply for a mortgage, auto loan, or personal loan. Banks and other financial companies don’t just look at your credit score when making a decision about whether or not to deal with you. Power Credit, which is good at money lending in Tanjong Pagar, is a reliable money lending firm. The factors influencing such money lending firms are as follows:
Your monthly income is the primary factor that is considered when calculating the interest rate that will be applied to your personal loans. It is a fact that is commonly acknowledged that responsible people who have a high income and a large amount of discretionary income have a larger capacity for repayment than those who have lesser earnings. People who have a high and consistent income outside of their primary occupation have a better chance of negotiating reduced interest rates on their loans, as this is a standard practice in the financial lending industry. Nevertheless, this might not be the case for borrowers whose income levels are lower.
Loan approval is heavily influenced by a borrower’s credit score. If you’re applying for a personal loan, your credit score will play a significant role in determining your interest rate. To a large extent, the quality of one’s credit depends on his or her history of borrowing and repaying borrowed funds as well as his or her current income. The higher the credit score, the more confidence lenders have in the borrower’s ability to handle their finances.
Your current place of employment is one of the many aspects that lenders consider when determining whether or not to grant you a personal loan. This is due to the fact that personal loans are almost always unsecured. The explanation for this is quite straightforward: lenders believe that borrowers who are employed by a reputable organisation are more likely to be financially stable and responsible for making payments on time. As a result, lenders frequently have more lenient lending policies for borrowers who are employed by certain organisations.
History of Defaults
If a lender finds out defaults in your credit history, they will charge you a very high rate of interest. Along the same lines as monitoring the credit score, if a lender discovers failures in your credit record, they will either deny your request for a loan altogether or charge you an extremely high rate of interest on the loan. The majority of creditors give preference to borrowers who have never been late on a payment in the preceding year.