Consumer credit? Why people are taking it?
Anyone who wants to receive a consumer loan should understand that this is not a quick loan, and usually the amounts that can be obtained with consumer credit are far higher than short-term credit obligations, and therefore these loans are considered to be more serious loans. These loans usually have a longer repayment period and their interest rates are lower than for pay day loans, but they can not be received as quickly and often customers have to submit a variety of documents to the creditor so that it can make sure your solvency.
Before the emergence of quick loans in the UK market, the only possibilities for people were leasing and consumer loans, and now, like in the past, people are starting to choose these services because they are much more convenient and offers are way better. Other indicators like interest rates are much better and, therefore, people are more likely to save money in the long run.
What are the Consumer Credit Criteria?
First, the person applying for a loan must be at least 21 years old.
In assessing the solvency of a potential client or creditworthiness, income stability is usually assessed – the regularity, amount and the adequacy of the monthly income to cover the payment of the loan. The most commonly is that credit company goes over the last three months of your band statements to make sure you’re able to pay back the loan. When assessing a person’s creditworthiness, lenders usually offer the appropriate amount of the loan and repayment terms, because, as we all know, the wishes of the individual are unlimited, but the possibilities to finance them are limited. It is important to note that solvency assessment takes into account not only income but also expenses such as daily expenses, utilities payments, other loans. In order to receive a loan, the monthly expenditure amount can not be more than 20-40% of the total monthly Income.
Personal credit history is also assessed during the process. If a person’s credit history is damaged, that is, there are still outstanding debts or regularly delayed payments, there is a significant reason for a refusal of the loan.
The client’s prior cooperation with the particular creditor is also taken into account.
When borrowing consumer loan, always carefully evaluate its necessity, as well as its personal ability and financial capacity to repay the loan on time and in full, without damaging your credit history, which can significantly impede or even make it impossible for any loan to be received in the future.