If you’ve been applying for a personal loan and it has taken days or even weeks to process your loan—double the time period if you have a bad credit personal loan in the pipeline—thank updates to the Credit Code for the delay and possible denial of your loan application.
For about two years now, new credit guidelines have been requiring creditors to be more responsible when giving loans to customers. Lenders must now prove that:
- You can afford to pay the loan, and
- The loan will not bring you “substantial hardship” when repaying it.
Lenders will have to study your current income, other sources of income, assets and liabilities, fixed and variable expenses, and credit history to make sure that you can afford the loan. Not only that, they may also have to conduct an even more extensive review if there’s a possibility that you’ll default on your loan given your financial health. This “suitability” history must also be current, obtained less than 90 days before your loan take out date.
Making sure that all these requirements are taken care of takes time—lots of time. So you see, the result of all these regulations is that lenders cannot easily or quickly grant loans, more so if you’re applying for a bad credit personal loan. Otherwise, creditors may incur losses should the courts prove that a debtor cannot comply with a credit contract.
Given this scenario, the fast personal loan that you’re thinking about today may have to be delayed quite a bit.