With the poor state of the economy, lenders - especially banks - have put more stringent measures in place to ensure that they weed out individuals who have taken loans in the past and not paid them back. Through these measures, they are assured that they only end up with borrowers who will pay back their loans, and so help maintain their business.
Those borrowers who already have bad credit scores and are in dire need of loans can now go to non-bank lenders in order to get loans of up to $10,000.
During the recession period, the only people who managed to access loans were those who had good credit scores. This is because banks set up stringent measures that immediately disqualified individuals who had less than perfect credit scores. This led to the suffering of a lot of individuals.
With the growth of the financial market, more players joined the market and these included the non-banking financial institutions. These lenders had fewer rules in place, which helped to ensure that individuals with lower credit scores were able to access personal loans. These loans are often issued with no background checks done on the borrowers. The good news is one can access personal non bank-loans to amounts as much as $10,000.
Unlike bank loans where one has to use their home or other assets as collateral in order for the loan to be approved, this is not a requirement for personal non-banking loans and it also helps to ensure that those individuals who do not own homes yet can have access to loans.
Before one is considered for a bank loan, the vetting process is really rigorous. Through this process, almost a third of the loan applications end up being disqualified. This is quite the opposite for non-bank lenders, since they do not have strict requirements. The most important areas they look at include:
Steady employment
When lenders are looking to determine whether you are capable of paying back the loan, the first thing they seek to know is whether or not you have a steady income which comes about due to steady employment. The longer you have maintained your job with your current employer, the greater your advantage, as the lender concludes your job to be steady.
Active bank account
For you to increase your chances of getting a non-bank loan, you have to possess a bank account that has been active for not less than ninety days. It may be a current or saving account, with the latter being the best, as it increases your chances. You will also be required to present certain documents such as bank statements dating back three months as proof.
Identification documents
Most of these non-bank lenders run their businesses over the internet and will not really meet in person with their clients. It is therefore necessary for you to issue identification documents and your location. In most cases, the non-bank lender will ask for your State ID and the latest utility bill that is in your name. This can be your electricity bill, and will be used to confirm that you are actually resident at the address you have provided.
Selecting the best lender
Non-bank lenders are different and have different criteria for evaluating your loan application forms. In order to increase your chances, you can apply with more than one lender. This procedure is very simple since you can do it from the comfort of your home through online applications.
source ezine