Loans are a particularly important financial instrument in economic life and are useful when bank customers, individuals or legal entities, do not have the necessary funds to make purchases or investments. In order to properly select customers, the bank has implemented a system to minimize the possibility that some customers do not pay their installments at the right time, applying objective criteria to approve or disapprove possible credit contracts.
Loans are a particularly important financial instrument in economic life and are useful when bank customers, individuals or legal entities, do not have the necessary funds to make purchases or investments. In order to properly select customers, the bank has implemented a system to minimize the possibility that some customers do not pay their installments at the right time, applying objective criteria to approve or disapprove possible credit contracts.
In the following article, you will learn what the credit eligibility system is, what are the main criteria that banks use to decide whether to grant a loan, and what is the maximum loan amount that they can offer to a particular client.
1. What does credit rating mean?
Over the last 30 years, the Romanian banking system has undergone a tortuous evolution, with moments of very high credit levels, but also periods of crisis, during which some clients were unable to manage or no longer wanted to pay on time. From this situation arises a complex system through which credit applicants are evaluated to determine their degree of risk of non-compliance with their contract when borrowing.
This system is put in place because sometimes the banking system is on the verge of collapse due to loan delinquencies, while loans are available regardless of whether customers can pay the installments or not. While there are methods to recover funds in such situations, they are difficult to apply, take a long time, and do not guarantee full recovery of funds. To minimize the risk of such situations, the bank decides to screen loan applicants according to the principles of accuracy and objectivity.
2. Eligibility criteria for personal loans or mortgages
Eligibility criteria are set by each bank, taking into account the willingness to make loans and the hidden profit income from interest and commission payments, as well as the potential danger of individual customers defaulting on credit terms. protocol. So these conditions may vary from bank to bank, but of course a credit eligibility check will be done in all cases.
To help people who want to obtain a loan, the websites of most banks in Romania offer loan eligibility calculators, where the required data is entered and an immediate answer will be provided if funds are provided or not, and which one. is the maximum amount that can be borrowed.
The main eligibility criteria for the loan are:
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- The minimum age of 18 years is a mandatory requirement. Middle-aged people are especially preferred, who do not exceed a certain threshold in this regard until the conclusion of the contract. This criterion is taken into account, in particular, in the case of mortgage loans, which can be extended to a long term, of 10, 20 or even 30 years;
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- A stable job can be a guarantee that the creditor will have at his disposal the sums of money necessary to pay the installments. In this sense, the seniority in the job is taken into account, as well as the seniority in the current service, but also the duration for which the employment contract is concluded (permanent or indefinite);
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- Total income (salaries, pensions, royalties, rents, dividends) is taken into account to determine the maximum amount that can be borrowed. The total installments paid by a client must not exceed a percentage set by the bank on the amount earned monthly;
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- Marital status (married or single, number of dependent children) influences the granting of a loan;
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- The presence of a person in the credit bureau as a bad payer is, in most cases, a guarantee that the bank will refuse to grant another loan. However, there are financial institutions that can grant loans even under such conditions, after analyzing the reasons that led to the payment problems.
All in all, people who want to get a loan must first check the eligibility requirements of a given bank and then choose the bank with the best chance of getting a loan.