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Signs that you will not be able to repay your loan

Before a person borrows a loan from a bank or non-bank sector creditor, any lender first assesses the potential creditworthiness of their potential customer, as well as their credit history. It should be said that these are the two most important indicators that are assessed before a lender decides whether or not to lend to a particular borrower.

Why are these metrics the most important characteristics of a potential customer?

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The potential customer’s credit history, which includes both past and present debt, indicates not only whether the customer has made or has not paid the required monthly loan payments, but also how exactly that customer has made these payments, payment discipline – whether payments have been made on time or have been late.

If payment is late or worse, the creditor has reasonable grounds to suspect that the customer in question is not creditworthy, meaning that his monthly income is not sufficient to cover the required monthly loan payments. Such a client is a real threat to the lender because there is a risk that the particular client will stop (temporarily or generally) making credit payments, thus adversely affecting the lender’s financial position.

In other words, a damaged credit history with overdue payments or still outstanding debt increases the likelihood that a negative credit history will recur even in the case of new credit.

Similarly, in order to avoid potentially disadvantageous and loyal customers, creditors also assess their solvency

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In this case, the credit default is not determined by a bad credit history, but directly by assessing the potential customer’s income – its size, regularity and stability, as well as its suitability for the initial loan payments. By aligning and evaluating these two ratios, the potential customer’s creditworthiness is determined.

If the potential customer’s income turns out to be inadequate to the amount of the loan, the loan is denied to him.

Logically, as in the case of a negative credit history, in the event of poor solvency, the potential client becomes a potential threat to the lender. Lenders generally choose to avoid such clients for their financial security. Of course, there are exceptions, such as fast credit lenders, who issue and risk small amounts of credit.

Such lenders focus on the quantity and not the quality of the customer and the established credit obligation, thereby facilitating the demand and availability of their services.

If you feel that your creditworthiness is insufficient for the loan you need before you set up a loan, avoid debt

If you feel that your creditworthiness is insufficient for the loan you need before you set up a loan, avoid debt

You don’t have to use an expensive service, that is, a loan if you don’t already have the money. Also, if you know that your credit history is not shining, it is better not to engage in re-indebtedness to avoid having to face time and full credit repayments, thus not only lowering your quality of life but also worsening your credit history.

Of course, for most potential customers, both of these, both credit history and creditworthiness, are positive prior to establishing a loan. However, as experience has shown, no one is immune from unexpected life situations, which have a negative impact on financial matters and thus affect creditworthiness.

If you feel that you are unable to make the required monthly loan payments on time and in full, you should never ignore these problems, but seek the advice of your lender – you may be offered a credit vacation or some other, more advantageous, condition for your credit. could settle successfully.

If you ignore these problems and arbitrarily delay or interrupt your credit payments, your credit history will be damaged, denying you the ability to borrow any credit in the future, or worse, engaging in debt collateral or even litigation.





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