One of the conditions that you must meet to get a cash loan is adequate creditworthiness. Before the financial institution makes the final decision whether to lend you money, it will check your creditworthiness, i.e. assess whether you will be able to pay off the loan taken, and agree on the conditions under which it can grant you it.
Banks calculate creditworthiness, i.e. define the maximum Arizona title loans amount that a potential borrower will be able to repay. Individual institutions may assess it completely differently, which is due to the fact that they do it in different ways. They usually consider, among other things:
- the amount of monthly income,
- the number of people in the household,
- the sum of monthly fees resulting from other financial obligations, for example, installments of other loans, alimony,
- limits and debit balances on personal accounts and credit cards – the bank will take into account all the products you have that allow you to take out a loan quickly, even those that you do not currently use,
- the amount of insurance premiums,
- household maintenance costs, for example water, gas, heating, electricity, rent bills.
Financial institutions will also check your credit history at the Credit Information Bureau, which BIK presents with a score. The more points the better for the loan seeker. The greatest impact on this assessment is the timeliness of past loans. Installments paid on time increase the number of points. However, if you were late with your payment, your grade will be lowered.
Too much credit activity, i.e. many loans taken in a short period of time or many applications submitted within a similar period, may also negatively affect the credit history.
The scoring also takes into account the credit limits you use on savings and checking accounts. If you use them frequently, your score may drop.
Signing the contract and starting the loan
If you pass the verification, the bank will present you with the conditions under which it can grant you a loan. Remember that, in accordance with the Consumer Credit Act, before signing the contract, the financial institution must provide you with an information form on a durable medium, in which you will find, among others:
– total loan amount,
– dates and method of payment by the bank,
– duration of the contract,
– rules and deadlines for repayment of installments,
– total amount to be paid, which consists of the amount of funds borrowed by the financial institution and the total cost incurred by the consumer in connection with with granting a loan,
– type of required loan security,
detailed information on loan costs:
– the loan interest rate and the rules for its change,
– the actual annual interest rate (APRC), i.e. the percentage value of the loan amount that expresses the total cost of the loan borne by the borrower,
– the consequences of delays in paying installments,
other information concerning:
– the possibility of withdrawal.
According to the Act on Consumer Credit, a person who applies for a loan has the right to ask the bank for a free draft loan agreement, even before signing it. Of course, this contract must contain exactly the same conditions for granting and repaying the loan as the information form.
While the process of granting a cash loan may seem complicated, in fact, the money can be in your account within minutes. If you prepare the necessary documents before visiting the bank or starting the online application, all formalities will take you only a few moments.