People apply for personal loans for all kinds of reasons. They may be trying to pay for college or they might be in the process of taking out a home loan. In addition to this kind of personal loan, there are other types of personal loans.
Personal loans are loans from banks, trust funds, and other financial institutions. Personal loans include mortgages, lines of credit, credit cards, and the loans for a car, home, or other investment.
Are there any pre-set conditions? Can a lender, in theory, require a financial situation before granting a loan?
Yes. There are certain pre-set conditions that must be met before a lender will consider granting a loan. These conditions are most often referred to as:
It is important to remember that lenders may ask for more information before approving a loan. This information may include the borrower’s credit history, income, assets, and any problems a borrower may have had with their previous loans.
Is there a maximum amount of time to repay a personal loan?
Although there is no maximum amount of time, lenders typically want to know the amount of time they can expect the borrower to repay a loan. Lenders are most interested in a borrower who has made a good faith effort to repay the loan on its terms.
Can a lender require the borrower to give proof of employment?
As mentioned earlier, many personal loans are with credit unions. This may make the borrower more inclined to repay the loan. Lenders are typically interested in a borrower who has been working and shows a willingness to repay the loan on time.
If a lender requires the borrower to provide employment proof, this may not prevent a borrower from paying a personal loan with the credit union. However, the lender may have to go through certain procedures to receive payment from the borrower.
There are exceptions to the employment proof requirement. One of the exceptions is if the borrower has been awarded a government grant that would exempt him or her from having to make employment proof. Other exceptions can include:
The borrower was a military service member who had a qualifying retirement account.