3 Factors That Could Be Considered When Determining Your Eligibility For A Signature Loan

Posted on: 7 June 2017

When you need to borrow money, as the average consumer you will be faced with a few different options. If you have bad credit, you may only be able to find high-interest payday or installment loans. If your credit is only fair, you may be eligible for a collateral loan. On the upside, if you have stellar credit, you may be able to get a loan through a bank or other lender just by providing your signature as promise you will pay the money back as outlined. While signature loans are the simplest in form and function and definitely usually more desirable, these types of loans are reserved for the most worthy borrowers. Take a look at some factors that could come into play if you apply for a signature loan. 

How long you have been employed. 

Income is a huge factor in most loan applications because the lender needs to know that you have a substantial and reliable enough income that you will be able to make your monthly payments on time. With a signature loan, your employment will be even more considered through the loan application process because if you default on the loan, it can be even harder for them to recoup their losses. The lender may look at how long you have been with your current employer or how many times you have changed jobs over the last several years. 

How many credit accounts you have open and their balance. 

Consumers who have stellar credit do not tend to keep numerous credit accounts open for the long term because their balances get paid off in a timely fashion and they usually do not have any open collection cases. When determining your eligibility for a signature loan, the lender will pull your credit report and take a look at how many open accounts you have and how much money you currently owe. If you have a lot of accounts or a lot of high payments, you may not qualify for the loan with just your signature. 

How long you have lived at your current address. 

Offering your signature as promise to repay a loan only means that the creditor needs to know for certain you are going to be able to be found if there is a problem collecting a payment. Plus, people who move around a lot tend to be those with a fair amount of financial instability. Therefore, the lender will want to know how long you have lived at your current residence. If you have recently moved, they will also be looking at your history in the prior residence. 

Contact a business like Las Vegas Finance to learn more.