Applying For A Bad Credit Bank Loan
For the potential borrower with questionable credit, the thought of applying for a bad credit bank loan may meet with disdain. After all, the question in the back of his mind from the onset is whether he is even going to get the loan. Unlike the borrower who has good credit, the borrower who has bad credit is hesitant to put all of his financial information in front of a stranger, and be told that there is nothing they can do to help him.
Positive factors
In spite of bad credit, some factors that weigh into the picture will actually have a positive affect on the borrower’s application. Some of those items include:
Longevity of employment
Experience with banking (checking and savings)
Debt to income ratio
Home ownership
Age of newest negative item
By weighing in all of the positive factors, one can surmise that a great many people who apply for a bad credit bank loan have the potential for approval. It takes some ingenuity on the part of the bank officer and one who understands that good people can run into problems that affect their credit, but it can happen.
Negative factors
On the other hand, an applicant with bad credit can have too many negative factors weighing against him for the bank to be able to help him. Some of the factors that weigh negatively against the applicant with bad credit include:
Unstable employment
Short time on the job or seasonal job
Debt to income ratio at unacceptable levels
Rent or mortgage consistently paid late
Recent negative entries to credit report
Inability to provide reasonable explanation for bad credit
Both the positive and negative factors will be weighed when determining if a bad credit bank loan will be approved. The bank officer is willing to help the applicant with bad credit, but he needs enough positive information to feel confidant that he is making the right decision in granting the loan.
Looking at the entire picture
The loan officer is not going to look at just one factor when he makes a decision whether to approve an applicant for a bad credit bank loan. Both positive and negative factors will be reviewed. The bank officer has to look at everything he has in front of him as well as what he felt during the interview.
With a bad credit bank loan, the lending officer often has to use his own judgment about the applicant. He has a “feeling” about the applicant and his attitude toward his past credit and the way he came across as he provided the information for the loan. Too much negativity either in the weighing process or on the part of the applicant’s presentation of himself, and the loan will not be granted. With this kind of the loan, the loan officer must trust his instincts when he makes the final decision, so as an applicant for a bad credit bank loan, you must convince the loan officer that you will repay the loan.
Jerry Warner writes general finance and loan articles for the Bad Credit Loans Online website at www.badcreditloansonline.co.uk
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