Requirements For A Line Of Credit

Requirements For A Line Of Credit
June 19 11:08 2017 Print This Article

A line of credit is a great option if you are in need of quick funds. You will get a credit limit, and you are allowed to spend until you reach that limit. The limit will become available again once you pay down your debt. For example, you have a line of credit with a limit of $1,200. You spend $300 of it. Your new limit will be $900 until you pay off the $300. However, there are several line of credit loan requirements that must be met.

Basic Requirements

Every lender is different. However, there are basic requirements that every lender sets for their borrower. You must be at least 18 years-old. You must also be a citizen or permanent resident. You will need to provide your full name, social security number and address and phone number on the application. You have to provide your phone number because your lender will contact you via phone.

Additionally, you need to have a bank account. Your check will be deposited directly into your account. When it is time for you to make your payment, it may be automatically debited from your account.

Ability to Pay

Lenders only want to lend to someone who is able to pay them back. There are several factors that lenders use to assess your ability to pay. They may look at your credit score and credit history. Your payment history, debt and credit age are some of the factors that determine your ability to pay.

They also look at your income. Lenders want to know that your income is enough to pay off the loan without struggling. Furthermore, your debt-to-income ratio is another factor that is taken into consideration. Even if you have a high income, lenders may be reluctant to lend to you if you have a lot of debt.

A poor credit score does not necessarily disqualify you from getting a line of credit. However, you may have to pay higher interest rates. If you are currently in the process of filing for bankruptcy, then you probably will not be approved for a line of credit.

Employment Requirements

You must be employed and have a regular source of income in order to get a line of credit. You must also be employed for a certain amount of time. Lenders use employment information to assess your ability to pay. Keep in mind that you will be required to verify your income.

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Louise Rice
Louise Rice

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