There is a process that everyone has to pass on to get a loan. It all starts with the need for a new home, car or other high value movable property, but there is not enough equity – loan. Then it ends up getting the requested amount and buying the new apartment, car … etc. (Or maybe even more that we paid the last installment.)
There are a couple of events between the two. After formulating the need, we first consider the most important aspects , and then select the loan from which loan institution we would like to pick up and the paperwork can start.
The steps of loan rating
The first step is to assess whether we are able to borrow a higher amount, and how likely it will be to repay it. Banks are not charitable associations, they thoroughly examine where they put their money (which in many cases is not theirs but their investors).
loanworthiness testing is a complex and often lengthy process that may take weeks, depending on banks, but generally everyone follows similar principles. They assess our income conditions, weigh the risks, ask for the necessary documents, and qualify us as a taxpayer before deciding whether or not to get the loan . For example, there are banks where lower risk debtors are rewarded on more favorable terms (lower interest rates).
In the course of the investigation, banks examine the following risks:
- the level of our income – if it is too low, it is not certain that we can get the loan we look for, because we can take up at most and for such a term that the installments do not exceed 50 percent of our monthly income (60 percent in case of a monthly income over 400,000 forints);
- what debtors we are – this is checked in the Central loan Information System (KHR, formerly BAR list), where you can find the details of our previously entered loan transactions, for example, how much we paid exactly, whether we had repaid the loan you had previously taken;
- our personal circumstances – were we registered as a registered worker, a public worker;
- does your bank account receive your income ,
- do we have income from undeclared work.
Of course, the bank needs documents for these as well. Of course, personal documents are in first place, then
- income certificate – it can be either employer or pension, or other;
- documents concerning the background of our employer;
- employment contracts;
- a personal income tax return from the previous year;
- an extract of the last few months of the bank account where we receive our income;
- the paid utility bills for our home address also for the last few months;
- valuation of collateral for mortgage loans;
We are more likely to get loan,
- if our income exceeds the minimum wage,
- if our workplace is secure (eg not in liquidation),
- if your contract is for an indefinite period
- if we pay our bills properly,
- if we don’t have a public debt,
- if, in the case of a mortgage loan, the value of the underlying property covers the loan amount extensively.
In these cases, there is no reason to worry about having a good chance of getting the requested loan and the property (or movable property) you want.