Applying for a loan
You'll probably notice that the process of applying for a loan is more complex than applying for a credit card. That's because a loan usually involves a greater sum of money than you can borrow with a credit card. But knowing what to expect can make the process less intimidating.
When you apply for a loan, the bank or other potential lender will review your credit report and credit score, and you'll have to provide additional information, including:
Employment: You'll have to list the name of your employer as well as your salary, and you'll be asked to provide pay stubs and tax information. Lenders want to make sure you have enough income to repay your loan.
Savings and credit accounts: You'll have to give information about all of your assets and liabilities, such as bank accounts, credit card accounts and investment accounts. Lenders like to have a full picture of any assets you might have available to help you repay your new loan as well as your existing loans.
References: You might be asked to give the names of a contact at work or a professional such as your lawyer who can recommend you as a candidate for the loan.
The lender will consider several factors, including how much debt you carry compared to your total income, whether you have previous experience with that lender, and your credit report and credit score. That's why it's so important to be sure you always repay what you owe on time, and it's exactly what the lender expects, too.
Credit after age 62
If you're 62 or older, you might have trouble getting credit, especially if you've already retired or if you don't have much of a credit history because you've made purchases in cash for most of your life. It may help if you begin to establish a credit history by getting a credit card and paying the bills regularly. You may also want to explain any source of income other than a job — such as Social Security, savings accounts and other assets — when applying for credit.
