What are the Factors in How Much I Can Borrow in Overnight Loans

by: Mike Johnson


Your payment history is simply what it says it is, a history of your payments. This can include everything from utility bills to credit card statements. They will look at whether you choose to pay your bills on time or not. They will also consider if you have failed to pay an outstanding debt.

They will decide if you are a trustworthy borrower by how you have paid your bills, loan payments, and credit card payments in the past. If you are considering applying for a loan and your payment history is out of line, you might consider waiting a few months and cleaning up your act.

Banks, credit unions, and other financial institutions won't lend money to people if they don't think they will get paid back. They want to see your good history of being financially responsible for your bills and debts.

This accounts for approximately 35 percent of FICO score, or your credit score, which has a major role on your approval. Lenders also want to see a long credit history with financial institutions. This means that you should never close that first account.

Lenders will want to see that you have worked with money and debt in the past and have handled it well, or have paid it off in full. If you don't have established credit, it might be something to look into. Consider getting your utilities or phone bill put in your name.

Make sure you pay your bills on time and your credit rating will be fine. You wouldn't want to ruin your credit just as you are beginning it. It is much easier to damage your credit than it is to repair it.

Another major factor to your loan approval is your outstanding debt. Lenders don't like to see you filled up to the brim with debt.

There is a certain income to debt ratio that lenders like to see. They like to see enough available income to cover the monthly expense of the new loan.

Another thing lenders must consider is not only your loan approval, but the loan amount. Lenders will look at your current and past income. Most lenders will require both your current pay stubs and your tax statements from the previous year.

Lenders will use this information to decide what amount they feel they can loan you. You will need to look at your own income and status and decide if you can take on the monthly payments that the loan amount will bring on.

Always remember that you can get a better loan interest rate with your good credit score. It is important to continually work on improving your credit score so that you can always qualify for that next loan.