If you were approached by someone and they expressed their need to borrow a chunk of money from you, what would be the first thing that runs through your mind? I may stop and think about who it is I’m talking to, what they need the money for and most importantly, will I see that money come back to me? If this person is known to ask for money with little to no chance or returning what they borrowed, I would lying if I said I might just lend the cash. I’m not a financial institution nor am I a cash advance lender, but I like to think about someone’s credit worthiness before I hand out my hardworking money.
A cash advance lender will look for bank account readiness.
Emergencies are thrown upon us and if there is no cash to cover the costs, it can send a person into a panic for quick money. Someone’s creditworthiness is more than just a creditor’s opinion. I know a few people who go to friends and family looking for a handout. It is always presented as a request for an emergency loan, but knowing who they are and how other “loans” turned out, it is not unjustified to think that lending money to people like this is interpreted as a “hand out”. It definitely is a hard decision when it concerns a family member or a personal friend. Relationships are strained and tensions build. An online cash advance lender will not pry into credit history, but they will learn whatever they can about the applicant through healthy bank accounts. Once creditworthiness is determined, the applicant will receive their answer.
Creditworthiness is defined as the ability to meet debt obligations. Individuals and companies are ranked by creditors using credit scores and history to determine their ability to pay back debt. Credit behaviors are watched closely. Does a person payoff one type of debt and let others slide? ? Are there certain times of the month in which dedicated money is spent elsewhere? Offering someone a personal loan knowing that the bankruptcy has been discussed may not be on your best interest unless of course you have money to spare. Personal loans may have an advantage by knowing inside information to the borrower’s finances. They may also have a disadvantage if the borrower is not upfront about all their prior debt. So many varying factors involved:
- Is there a medical emergency?
- Does the person have a side job which supports income that is not reported?
- Are there other people helping?
- Has the person relied upon cash advances or payday loans?
- How many other individuals are owed money?
Creditors have access to lots of information, but will not be aware of short-term loan usage unless it is reported as a default loan by a collections agent. The cash advance lender will only utilize a bank statement to determine creditworthiness. A friend or family member may or may not know more than a creditor. Money relationships sure do get tricky. If you are thinking about lending money, have a Plan B ready to revive your own bank accounts if you do not receive on-time payments or if the loan goes into default. Professional lenders have all the terms and conditions laid out in the contract. It never hurts to plan for the worst in order to protect your own creditworthiness.
