Requirements and criteria

What requirements do you need to meet to get a loan

Every lender has its own borrower requirements and its own rules for assessing creditworthiness. But some requirements are found almost everywhere.

• Age. You must be at least 18 years old. Many lenders set a higher threshold — 20, 21 or older — on the assumption that older borrowers have a more stable income. There is also an upper limit: usually you must be no older than 70–75 by the time the loan is fully repaid.
• Residence and bank account. As a rule, you need to live in the country where you are taking out the loan and have an active bank account there. It is often used to verify your identity and pay out the money.
• Contact details. You need an email address and a mobile phone: confirmation codes and documents are sent to them.
• Regular income. Your income must be steady and sufficient to cover the payments. You may be asked to confirm it with a bank statement, a salary certificate or tax authority data.
• No outstanding debts. You must not be on a debtors’ register. Some lenders also refuse a loan if debt collection proceedings are under way against you.

Only a few lenders offer loans to borrowers with past problems, and usually on less favourable terms. You can find them in the “Bad credit loans” section.

How is creditworthiness assessed

By law, the lender must assess your creditworthiness before granting a loan and must not grant a loan you are unlikely to be able to repay. This assessment determines whether you are approved, for how much and at what rate: the more reliable the borrower, the lower the rate. Lenders most often consider five factors:

• Credit history. The lender checks what loans you have taken before, whether you paid on time, whether you have existing debts and whether any debt collection is under way against you.
• Income and expenses. The lender assesses how much money you have left after essential expenses and payments on other loans — and whether that is enough for the new payment.
• Employment. The type and stability of your employment matter: a permanent contract, how long you have been in your current job, or your income as a self-employed person.
• Family situation. The number of dependants affects your monthly expenses and therefore how much you can afford to pay on a loan.
• Assets. For some types of loan, assets that can serve as collateral are assessed — real estate, land, a car.

How to improve your chances of approval

• Ask for an amount that matches your income: asking for too much is a common reason for rejection.
• Pay off small debts and arrears before applying.
• Give accurate and truthful information in your application: the lender will check it, and discrepancies lead to rejection.
• Don’t submit many applications at once: every check is visible in your credit history.
• If you are rejected, find out why first, and only then approach another lender.