Mark Hauser is a financial expert who wants you to know what you are signing up for when you apply for a loan. He details how consumer loans work and highlights the seven criteria lenders consider when evaluating your application.

  1. The application credit score

Mark Hauser explains the concept of credit scores; lenders consider more than one type of credit score.

  1. Employment history and income

Having a stable and well-paying job history is important to get accepted for a loan. Ask your current employer about a pay stub for your credit application. Even if you have a job now but haven’t worked there long enough to get a salary history, ask your employer to write a letter stating how long you have been employed and what they can vouch for regarding your work ethic and ability.

  1. Debt-to-income ratio

Mark Hauser mentions that your income is only one of the factors to consider when calculating your debt-to-income ratio. Lenders will also consider your credit card balances, mortgage balance, and other types of debt.

  1. Available Liquid Assets

People with assets to cover their debt obligations, such as a 401(k), can be approved for loans without any problem. You may also ask your employer to verify the amount of your pension or other savings.

  1. Value of the loan collateral

If you are applying for a loan to consolidate your credit card debt, the lender may ask you to provide a list of all your debts, interest rates, and balances. You may be asked to sign over the deed of the house you live in or an insurance policy.

  1. Amount of the down payment

The more money you can put as a down payment upfront, the more chances your loan application will be approved.

  1. Term of the loan

Longer terms with low-interest rates may seem tempting. However, you will have to pay a lot more in interest over the life of your loan. 3- and 4-year loans are great for consolidating your credit card payments and paying off your debt faster.