2014 and 2015 In December, consumer applications for credit in various financial institutions increased by 10-20%. A similar upturn is expected this month, according to experts in the credit history system Mano Irene Lupin.
So what to look out for consumers who plan to buy leasing, order a credit card or take out a consumer credit during the holiday season?
Personal finance experts agree: saving up for holidays in advance
This also applies to borrow. Buying goods and services from your own money, rather than borrowed money, is usually cheaper because if you borrow, you will repay the borrowed amount plus interest with other taxes.
However, let’s just imagine that the amount you put aside was not enough or the purchase is too expensive to save, say a new car. What questions do consumers have to ask themselves before applying to a bank, leasing company or consumer credit company?
1) Is there a sustainable income?
Not all income generated is sustainable. If you changed jobs in the last half, part of the salary financial institution may be rated as sustainable and part not. Therefore, if you are considering borrowing, we recommend that you often wait six months after starting a new job. There is also more unsustainable income.
Income from seasonal work, various lump sums (eg salary supplement), disability, survivor’s pension, etc. Envelope wages, if any, are also far from sustainable because financial institutions calculate the income reported in Sodra.
2) Tidy credit history?
If a family doctor asks you how you feel, a financial institution, if you apply for credit, is interested in your credit history. It consists of two parts: financial obligations and their execution. Although many may swear that they know everything about themselves, there are many life situations. Moving from one apartment to another and, as a result, uninterrupted Internet or other contracts can leave a major or smaller problem in your credit history – outstanding obligations. Review your credit history and verify the information provided by creditors regarding financial liabilities and late payments, if any. Rather, make sure your credit history is clean and you can approach a financial institution with a calm heart.
3) Tension in the budget?
Although it may sound complicated, budget stress can be measured quite simply. The more of your monthly sustainable income you spend on available credit installments, the less flexibility your personal budget will have. When applying for credit, financial institutions follow the so-called “40% rule”. Meanwhile, she says that the share of monthly income for all credit installments should not exceed 40%.
This means that if you get $ 1,000 in your hands, the maximum amount you can spend on credit installments is $ 400. So answer yourself the question: What percentage of my income do I currently spend on all credit (including credit card) payments combined: 5%, 20%, 30%?
If you have a spouse and are considering applying for a credit institution with a financial institution, this year’s innovation comes to you. According to the new regulations of the Bank of Lithuania, the creditworthiness of both spouses must be assessed when ordering a credit card, filling out a leasing application or applying for consumer credit.
If you come to the showroom alone and want to fill out a leasing application for a new TV without your spouse, you will have to repeat this step again with your spouse. As long as the Bank of Lithuania does not apply exceptions, be sure to grab hold of your spouse and buy low-value items such as a vacuum cleaner, a beard, a food processor, etc.
According to My Irene Lupin, more than 11 people are in this area. m. Over the months, more credit applications were rejected than accepted by financial institutions. For example, in the leasing and larger consumer credit segment over 11 months. On average, 62% of applications were rejected (58% in 2015) and 85% of applications were rejected in the retail credit segment (68% in 2015). The most common reasons for rejection are inadequate or unstable client income, strained or bad credit history, and credit is sought without the consent of the spouse.