Creditworthiness to get a loan
We need adequate creditworthiness to get a loan. This is one of the basic conditions, however, various banking and non-bank institutions approach their abilities in a different way. What exactly is the creditworthiness and how is it assessed?
Creditworthiness refers to the borrower’s ability to repay the loan amount, i.e. capital with payments at a given payment date. According to Polish banking law, having the right creditworthiness is necessary to obtain a loan. In exceptional circumstances, however, the entity offering the loan may give it to a person with insufficient capacity when he provides adequate security.
When you want to decide on a loan or a bank loan, then the right creditworthiness is essential. However, the case looks different in the case of non-bank lending companies that do not always check the creditworthiness of customers, which means that they also offer loans to those who would have been refused a bank decision.
How is the creditworthiness calculated?
Credit analysis is used to test creditworthiness. On its basis, you can assess the credit risk associated with granting a loan to a borrower. The credit risk is influenced by many factors, including the amount of credit granted, its purpose, the length of the loan period, the borrower’s financial condition, credit history and features, including age, marital status, number of dependents, form of employment. Of course, we have only introduced a few of these factors, as there are many more.
Below we present more detailed information on what factors shape your creditworthiness. It is worth getting to know them if we want to find out whether obtaining a loan or a loan will be possible.
Factors affecting creditworthiness:
• income – of course, the better income we have, the more you can get a loan or a loan
• sources and regularity of earning income – currently an employment contract is preferred for an indefinite period, but we can also receive loans as persons working under a civil law contract, having their own activity, pensioners, pensioners
• current debits and liabilities – other loans and credits, credit cards, maintenance, bills and other expenses reduce the creditworthiness, so if we have high incomes, but equally high burdens and liabilities, we will not have high ability
• type of loan – otherwise the creditworthiness is calculated for cash loans and special purpose loans, for example for cars or mortgages, for purchase of an apartment
• loan amount – the higher the amount, the higher the capacity we must have
• loan period – the longer period allows you to get a smaller installment
• current credit history – problems with repayment of debts recorded in databases, for example retrodatabase and unitrix, reduce creditworthiness
• additional collateral – it may be a surety, a property belonging to the borrower, a promissory note