For those who have a high credit rating, there are many good loan offers with low interest rates and quick and easy application process. It is easy to get a private loan even with a high loan amount, but it is more than just the income that determines whether the loan will be approved. To get the cheapest loan is not enough with a high income. Lenders also look at other variables such as fixed employment and debt ratio (existing liabilities in relation to income). An editorial over at anmgemelos.com
The credit rating is the most important factor for obtaining a loan and the income is of crucial importance for the credit rating. A higher salary means that more money is available each month to pay off the loans. The income sets the limit for the maximum loan amount that it is possible to get. The income is not the only factor that leads to a high credit rating. A loan assessment is based on several factors, including income and credit ratings, but these are separate pieces of the puzzle.
SAL Bank has good terms on large loans between SEK 200 – 400,000 for borrowers with high creditworthiness.
Borrow with high credit rating
- Borrow with high credit rating
- Loans with low debt ratio
- Low credit limit despite a high income?
A credit rating indicates a probability that a customer will fail to repay his / her loan and be calculated on both individual and group data.
In order to generate a credit rating, a computer program goes through credit reports and other available information;
- If and how long the person borrowed money before
- If current loans are paid according to plan
- Late payments
- How there are debts (how much, and what type of debt)
- Other public information (eg bankruptcy or legal judgments from the creditor)
- If there have been applications for loans or if there have been major changes in any of the above
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More information is available on the credit rating agencies’ websites and can also be obtained from the lender. The data used comes from public and private records. In addition to looking at the credit rating, a lender may want to know more about how the customer gets their income.
An insufficient income is the most common reason for refusing a loan application. Often, an offer of a lower loan amount may follow with a refusal due to low income in relation to the loan amount.
Loans with low debt ratio
The debt ratio is the size of the loans in relation to the income: according to law, a creditor may only lend money to consumers who are able to cope with repayment of the loan. One method of doing so is to calculate debt to income relationship. The disposable income is set in relation to debt payments – and any payments required on new loans. In general, it can be borrowed as long as the debt payments are below 25%.
Some lenders have their own scoring models to evaluate your loan, but these models differ from a credit rating. The income is one of the factors used but how it is used varies between different lenders.
The income is an important factor in getting approved for a certain loan amount. Technically, it does not need a part of the credit rating, but only decides how much it can borrow if all other tasks look good.
Not high enough credit to borrow?
If you do not have enough income to get approved on a particular loan amount, there are more options:
- Pay off debts so that the debt ratio goes down.
- Increase your income, either by earning more or finding a co-applicant (their income will also be taken into account)
Low credit limit despite a high income?
It is a common misconception that a high salary automatically means that it is possible to take a larger loan. The credit rating or the probability of having payment problems in the future has more to do with a person’s economic behavior than the income in itself. A messy personal situation with many job and address changes can make it more difficult to get a larger loan despite a high salary.