Many individuals and
businesses are able to survive based on the presence of bank and lender loans.
Lender loans provide money to help businesses make payroll, expand their
operations, or hire more staff. Loans also help individuals make additions to
their house or pay basic expenses. When looking for a loan, individuals want to
find the best terms possible. They have to present their best case in order to
earn terms that will actually work for their business or individual financial
needs.
Feasibility
Lenders are looking for individuals who have a plan to make the money required to pay back their loan. This feasibility is the most important factor when determining a loan decision and the terms behind that decision. Loan officers make their money by lending out certain amounts of money and having borrowers pay that money back with interest. The terms and interest rates offered are related to the chances that an individual will pay their money back and the related chances that they will default on their loan.
As a result, lenders like Gladiator Lending often ask a series of financial questions related to individuals’ income and job status. Individuals must have a clear plan in place to pay off either the personal or business loan. They should detail their expenses and income. Any potential bonuses or raises should be mentioned to a loan officer. A borrower has to be prepared for a lender who may have questions or concerns about a person’s job and payment status. A bank will not make a loan to an individual if they are convinced that the individual will not have the money to pay that loan off.
In order to show feasibility, an individual must construct a narrative where they are a competent individual who will most certainly be able to make all of their loan payments on time. They should research any potential pitfalls or holes in their argument. An individual working for a business should be prepared for any criticism towards their business field that they may receive. Individuals should have backup plans for if they lose their jobs. A few hours of research and preparation can mean thousands of dollars saved or lost in interest payments over a period of years.
Experience
Experience is helpful for determining loan terms and for acquiring the best loan possible. Gladiator Lending and other large and small lenders certainly want to find individuals who are experienced at paying off their bills. A high income relative to a loan may not matter if a person has shown in recent years that they were delinquent or generally unable to meet their previous debt obligations. The most familiar way for an individual to show their experience with managing payments and lending is through their credit score. Credit scores are compilations of how an individual treats and uses their credit. It is a record of the debts and debt payments that individuals have taken over an extended period of time.
Confidence
The personal meeting with a loan officer can be enormously effective at helping to set favorable terms. Smaller lenders like Gladiator Lending often want to make some sort of a connection, either virtually or in person, with the individuals they are lending to. Many individuals receive a set list of advice when looking to set terms and ask for a loan. They are told to sit up straight, dress well, and always be respectful. This process may seem redundant or unnecessary to most individuals who are confident in their plan to pay back their loan. It is not part of a credit score and does not appear on any sort of balance sheet.
But these concepts are vital because of the role of trust in the acquiring of a loan from the vast majority of small and large lenders. Trust is critical because of the information that an individual is sharing with their lenders. Lenders cannot always verify all of the information that an individual is telling them. They have to trust beyond the financial information and credit scores that they often require individuals to provide.
For instance, an individual may be able to explain that a negative entry on their credit report was caused by an illness that was not reported anywhere else. The lending institution has to trust an individual’s word if they decide to mitigate the effects of that negative credit report mark when making a loan. An individual who dresses well, arrives prepared, and takes the process seriously has a much better time receiving trust and the benefit of the doubt than individuals who do not.
The lender’s own finances
Additional factors outside of a borrower’s control influence loan terms. Loan terms may be influenced by the overall economic health in a particular area. Economic trends can determine how long a loan is extended for and the interest rates an individual may have to pay. The lender also has to consider its financial situation. A lender that has been successful in one particular area may want to continue making loans work in that area.
Lenders who have suffered significant recent foreclosures may not be willing to accept marginal cases or low loan terms. Individuals do not always know about these factors. However, they should certainly read news reports and publicly available information before picking a particular lender and setting an appointment to discuss a loan. News reports may help an individual find out what lenders are facing stressful situations or economic hardships. Such information can help an individual time their meeting as carefully as possible to ensure the best potential loan rates.
Conclusion
People are understandably concerned about the lending process. They are stressed about their case and worry about how their terms will fit their company’s bottom line. Part of each decision is influenced by forces outside of the borrower’s control. For the rest of the lending process, individuals simply need to be as thorough and careful as possible. They have to make the best case that they can to their lender and articulate their business/payment plan clearly and forcefully.