When applying for a loan, the number of options available today seems almost unlimited. The plentiful supply of loans and credits has led to the best loan being available, even from an unknown lender. We’ve put together a 12-point checklist of the most important things to remember before applying for a loan. As slickcashloan.com offers loans for people with bad credit history you can opt for it without a doubt.
How much loan can I get?
The ratio of regular income to expenditure is the basis for how much of a loan can be obtained. Therefore, a high income does not automatically mean that the loan will be granted generously. Instead of just income, the lender is interested in how much money you will have to spend each month after your mandatory spending. The revenue-expenditure ratio is called the payment reserve.
The responsible lender will make sure that you have sufficient funds to pay even during months when there are unexpected expenses in the economy.
How do I calculate a deposit?
The calculation of the payment reserve is in principle a very simple calculation, but on a practical level, there are several factors that influence it. In the calculation of defaults, the amount of money left in the borrower’s monthly loan is sought.
Simplified, the payment reserve can be summed up using the following formula: Monthly income minus monthly expenses.
When applying for a loan, banks also assess the security of their income. Retirement or regular monthly income from a regular employment relationship is relatively safe from the lender’s point of view, especially if you have a long employment relationship. On the other hand, any bonuses or capital gains are often more uncertain for the bank and may not be taken into account in the same way in calculating the margin.
In addition to loan servicing costs, the following is taken into account as expenses in the balance of payments. housing, living and subsistence expenses.
How large must the payment margin be?
The amount of payment required varies from lender to lender and may also vary rapidly within the same bank – depending on the credit criteria currently in place. In addition, the required payment margin may be affected by, for example the borrower’s assets, other loan or credit repayment histories, the marital status, and the employer or industry in which the applicant is employed. However, what is common between lenders is that, in the event of a negative margin, the loan will not, as a rule, be granted. An exception may be the case where the applicant is consolidating his existing loans and thereby reducing his monthly expenditure.
As a rule of thumb, the current expenditure on the Loan and the Monthly Loan may not exceed 40% of the remaining income.
How much loan should I take?
A loan is always a commitment that you must be able to repay. The appropriate amount of the loan is such that its repayment does not need to be considered in everyday life. After a month of compulsory spending, there should be enough room for the economy to afford savings, vacations, hobbies, and also cover smaller, unexpected expenses or thoughtful purchases.
How long is the loan period appropriate?
The loan period has a major impact on the monthly loan repayments. An excessively long loan period accrues more interest in euros, but a too short loan period, in turn, reduces your household’s financial reserves and may, at worst, limit your savings, vacation or hobby opportunities.