Everything You Need to Know About Loans

Are you planning to apply for a loan in any time soon? If yes, then it is important that you take time to learn some new information. It is good for you so as to be aware to not only avoid possible mistakes but also, be able to contribute to other first time lenders. Things like personal income and expenses can in many cases be acknowledged but for some details such as your net worth, credit scores, and others, there is a need that you thoroughly seek to know the state in which they are before you can decide to apply for a loan. This article outlines everything you need to know about loans.

Credit Score and Credit History

Reliable credit score and history should give you an idea about how to pay your credit obligations on time. If your credit is good enough, there are chances that you will secure a loan on the most favorable terms. In addition, you are able to save a ransom over the period your loan will take to clear. Knowing your credit score is crucial in this case. With that, you are able to pull your credit reports thus you can detect errors that might affect your scores. A poor credit is never good for applying for a loan, for that reason, it is better to avoid loans if in case you are in such condition.


Research has it that it is what you earn that will always determine your ability to secure a loan. It is, therefore, vital to most lenders that you must provide the income proof before you can apply for a loan. In most cases when applying for a loan, if one is employed, one has to pay stubs, and provide both the W-2 forms, and a salary letter. A self-employed person, on the other hand, will have to produce the recent tax returns, invoices, and receipts in order to be safe.

Monthly payment obligations

Aside from your income, your monthly payment obligations also matter a lot when it comes to applying for a loan. In this case, if your monthly payment obligation is nearly exceeding your income, then paying for a new loan will automatically be a challenge to you. Due to this, you will have to list certain obligations such as mortgage payment and your rent.

Asset and Liabilities

A person’s net worth plays a big role in the loan application. Most of the time, this is what most of the lenders emphasizes on so as to grant you a loan. The net worth can be counted in terms of liabilities and assets which normally includes your valuables. According to research, it is good for your own personal knowledge when as a borrower you are aware of your net worth. Since a loan is a liability, whether it is a car title loans or any other, the more you understand your net worth, the more you are able to keep track of your finances after securing a loan.

Contact Information of the Employer

Your employer’s contact information is important so as to apply for a loan. Some lenders are usually strict that they can even go for the past employer’s information. This can be the only way to inquire about your income and employment dates so as to be able to apply for a loan.

In summary, it is never safe to apply for a loan whereas you are not sure to pay it back. Instead, it is critical that you learn more about loans prior to making a move. This mainly includes matters like the levels of interest rates, and others as discussed above.


Join our newsletter

If you like Critical Financial, subscribe and get our latest content via email.

Powered by ConvertKit

Share this post:

Recent Posts

Leave a Comment


Generate extra cashflow -- here are 97 ways.

96 Awesome Ways to Generate Extra Cashflow

Who doesn’t want more money nowadays? We’ve got you covered on that front. Here comes a long list of different ideas on... more →
Valentine's Day gifts that won't destroy your budget

Valentine’s Day Crafts Are Romantic Rescue from Crazy Inflation

Fall for the hype this week and you’re out an average of $143.56 for Valentine’s Day. Crafts and other do-it-yourself tactics... more →

Ultimate Guide to Bitcoin — FREE Ebook!

Have we got something for you: a free ebook about bitcoin! more →
Get a flu vaccine.

Why You Need To Get a Flu Vaccine Right Now

Flu vaccines aren’t just for the elderly  anymore. Here are 25 reasons you should go get vaccinated. more →
Financially successful

Acquire the Trait All Financially Successful People Have

Financially successful people tend to all have a lot of self-discipline. Improving your discipline in one area of your life often spills... more →

What’s the Best Free Recipe App?

The Apple Store and Google Play together offer more digital cookbooks than you probably have room for on your mobile device. So which... more →
New tax law might slow down housing market.

What Will the New Tax Law Do to the Housing Market?

The new tax law will have a profound impact on the housing market, although in ways that go beyond the deductibility of mortgage interest... more →

4 in 5 Households Will Get a Tax Cut in 2018

Four out of five U.S. households will get a tax cut as a result of the legislation that President Donald Trump signed into law today. more →
Will bitcoin reach $100,000?

When Will Bitcoin Reach $100,000?

Bitcoin has accelerated its pace of appreciation in recent months, and if the current levels between $15,000 and $19,000 make you itch... more →
The Dow Jones topped 24,000 -- now what?

The Dow Jones Crossed the 24,000 Threshold. Now What?

Stocks appear to be increasing in volatility, yet the markets closed on Monday, December 4 with the Dow Jones Industrial Average is... more →
Peer mortgage

Should You Get a Peer-to-Peer Mortgage?

If you can’t get approved for a home loan from a bank, you might want to look into applying for a peer-to-peer mortgage. more →
Investment gifting is awesome.

4 Things To Know Before You Donate an Investment

While donations of any kind are appreciated, gifting investments benefits both the giver and the receiver. Here are four key things... more →
Are you wondering: What's the Relationship Between the Stock Market and Federal Debt?

What’s the Relationship Between the Stock Market and Federal Debt?

Wouldn’t it be wonderful if gains in the stock market could actually reduce U.S. government indebtedness? If that were true,... more →

Best Ever Advice on Dealing with Credit Cards

When used right, a credit card can be a valuable asset to anyone’s finances. However, there are number of things you should do as... more →