In obtaining any loan, it is first necessary to assess the borrower’s creditworthiness. Based on the calculation of the creditworthiness, the Bank shall determine the maximum amount of the monthly installment. With this calculation, he assesses whether the borrower will be able to repay the loan – the principal, the related interest in the remaining costs associated with the loan approval, at the agreed time.
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In calculating your creditworthiness, the bank will take into account your monthly income, average monthly expenses, already hired loans or leases in all categories that present a risk in your settlement of the loan. Therefore, the Bank also distinguishes between employment for an indefinite or fixed term. As a rule, you can usually approve a loan for the duration of your employment.
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Banks usually charge a loan to the borrower’s income up to one or two thirds of his monthly income. Of course, exceptions (farmers, private individuals, fixed-term employment, etc.), therefore, the bank needs these data to verify the borrower’s solvency and to inform him of his current financial performance. The type of insurance is also affected by the calculation of the creditworthiness.
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You can calculate your credit rating yourself, even before you are consulting with a bank consultant in Arkansas. To calculate your creditworthiness you need a thorough overview of your monthly income in outflows. When determining the amount of the monthly installment, be precise and leave some reserves so that the new situation will not be pushed to the edge of liquidity.
Let’s look at the credit rating at Izidor in May, which receives one thousand dollars net salary per month, but they have different monthly expenses. Izidor has a good overview of his monthly expenses, while Maya’s personal finances are not very cautious about it and says that everything will be okay, as long as he has a regular salary.
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Everyone occasionally needs an additional source of funding for any major purchase for himself or for the household. Below we provide answers to the most frequently asked questions regarding the hiring of consumer loans.
What are the conditions for granting a consumer credit?
To grant a loan, you must meet the following conditions:
the borrower must not be less than 18 years old,
At the end of the loan, the borrower must not be older than 80 years,
the borrower must be a citizen of US and have permanent residence in US (in certain cases, the application may be processed individually and nevertheless approved),
the borrower must be creditworthy for the requested loan; the bank determines the creditworthiness on the basis of regular monthly income of the borrower (eg salaries, pensions …) and its liabilities,
the borrower must provide adequate credit insurance (insurance company, mortgage, surety …).
How long does it take to approve a loan?
The time of loan approval depends on the amount of credit, type of insurance, completeness of the prepared documentation, necessary approvals for the approval, status and credit ratings of the applicant, number of other applications in the processing. As a rule, the loan is approved within a few working days, except in the case of a secured loan with a real estate pledge, which takes longer to approve a loan.
What does the amount of the loan depend on?
The amount of the loan depends on the borrower’s creditworthiness, which is determined on the basis of the regular monthly receipts of the borrower and its liabilities, the type of insurance and any estimated purchase price.
What is the maximum repayment period for a consumer loan?
For a consumer loan with a fixed interest rate, the repayment period is up to 10 years; for a loan with a compound interest rate, the 6-month euribor + fixed premium is a repayment period of up to 20 years. The repayment period also depends on the type of insurance.
Types of consumer credit interest rates
Loans with a nominal interest rate where the amount of the monthly annuity does not change during the repayment period (fixed interest rate),
loans with a compound interest rate (6-month Euribor + fixed premium) for which the monthly annuity is changed twice a year, in line with changes in the reference interest rate euribor.
What are the ways of securing a consumer loan?
You can safeguard an approved loan in several ways:
payment of insurance premiums with the insurance company (loans with a repayment period up to a maximum of 10 years),
a guarantee of two creditworthy marriages that are not employed by the same employer,
Mortgage on real estate (mandatory with a repayment period of over 10 years),
the pledge of cash assets that are tied to the bank until the final repayment of the loan,
securities placement (the ratio is estimated by loan company with respect to securities held by the client).
Most borrowers insure a loan from an insurance company.
A consumer loan secured by a real estate pledge
You can rent a consumer loan in loan company and insure it with a real estate property. At the same time, you conclude an agreement with the Bank to secure a receivable. The maximum repayment period is 20 years, and the interest rate depends on the repayment period and the type of consumer loan.
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The credit documentation for the regulation of the real estate property comprises:
land register extract, maximum 5 days old,
the appraisal of real estate, which is, as a rule, carried out by the valuer who has concluded an agreement on business cooperation with loan company – the construction of a real estate appraisal; the appraisal must not be older than 1 year.
A loan agreement and a mortgage agreement are signed in the form of a notarial record with a notary. At the conclusion, the borrower and the pledgor must be present, if they are two different persons.
How to get a loan with bad credit in Arkansas?
The cost of renting a consumer loan secured by a real estate pledge is:
processing costs and loan approval,
the cost of a valuator under the tariff for those real estate appraisals,
notarial charges at the notary’s tariff,
costs of the court (registration in the land register),
the cost of erasing the mortgage.
The borrower arranges the appraisal of the property and collects the necessary documentation, the rest is arranged by the bank. The bank shall notify the borrower of the agreed time limit at the notary to sign the agreement.