If you need to take out a loan, a reputable lender can help guide you through the process to make the right financial decision. Contact us now for more information!
When you apply for any line of credit, you will have to sit through a few conversations with your loan officer, who will try to determine whether or not to approve your loan.
The process itself can be a bit stressful, especially if you’ve never gone through it before and have no idea what to expect. To put your mind at ease, here are 4 questions a loan officer will likely ask you:
1. How Much Money Do You Need?
First, your loan officer will want to know how much money you want to borrow and for what purposes. Lenders are very cautious about who they give money because this entire model is rather risky by nature.
Of course, if you’re interested in a personal loan, you won’t have to give the officer a complete overview of how you’ll spend the money, but you do need to have an answer prepared.
2. What Does Your Credit Score Look Like?
Your credit score can show the officer what type of borrower you might be in terms of:
- What your current debt is
- If you make on-time payments
- If you’ve missed payments in the past
- If you have any other negative events such as foreclosures or bankruptcies, etc.
The lender wants to know you can be trusted to pay the money back to them and not default on your payments.
3. What’s Your Salary and How Secure Is Your Job?
After they establish you can be trusted to pay the loan back, they’ll want to know if you have the means to do it as well. If you have a steady job with a good income, this shows the officer you can cover the monthly payments without problems, and the lender won’t have any surprises along the line.
Expect to be asked about your monthly expenses as well. A big salary on paper doesn’t mean a lot of your monthly expenses are very high. Again, they will not necessarily go into invasive details, but you can prepare by having a figure ready to present to them.
4. Will You Experience Any Financial Changes in the Future?
This can seem like a strange question, but certain financial changes are more or less predictable. For instance, a child going to college soon means you’ll have additional big expenses to cover, such as tuition or even housing.
These big changes may affect your ability to pay back the loan, so the officer will want to see whether you have a plan for such expenses, such as savings or other financing options.