Creditworthiness is granted when a consumer is legally authorized to take out a loan. But “What monthly loan interest can I afford?
To what extent can I borrow? Isn’t the key question?
The topic “How much can I borrow” cannot be unequivocally answered with a specific value. Instead, it has to be clarified on a case-by-case basis and depends on the term and the interest rates. In the credit-dependent lending business, it is conceivable that lenders who do not only consider the Credit Bureau value can give married couples a higher credit rating than singles.
It is not the absolute amount of the loan that determines the maximum amount of credit that can be granted to a particular applicant. What is more important is the monthly cost of the bond business. Therefore, the answer to the following question before taking out a loan is not “How much can I take out a loan? “But” What monthly loan interest can I pay off?
“These questions are checked by the house bank when lending. For this purpose, the current income is compared with the expenses incurred. If you have an exceptionally low effort, you can ask some banks to take the current situation into account. The fact that the solvency of the monthly installments and not directly the loan amount is the upper limit of debt financing allows consumers to take advantage of higher loans by opting for a longer term.
As a result, the monthly fees decrease and an improved budget result is achieved even with larger sums. Even if the sum of the monthly installments and not the absolute loan amount is decisive for the household account, the question arises: “How much can I take out a loan? On the one hand, the monthly rate cannot be arbitrarily reduced by increasing the term, since many credit institutions offer a maximum term of seven years and are completely unusual for consumer loans.
Few credit institutions
In addition, almost all credit institutions have defined minimum and maximum amounts for use. There is a wide range of absolutely maximum loan amounts. For some financial institutions it is already $ 30,000, while a few credit institutions also provide $ 100,000. This limit applies to an unsecured consumer loan, but of course larger sums are also possible in the course of mortgage lending.
A further restriction with regard to the loan amount is that unrestricted loans are usually only granted in increments of 1,000 dollars. In the area of real estate financing, the current lease helps answer the question “How much can I borrow”, but is not the only criteria.