Employment Status
Your employment status is one of the key components in a lender’s decision whether or not to grant you a loan. There are three different categories of employment status, which are employed, unemployed and self-employed. Which category you fall into can have an effect on whether you are offered a loan (depending on which loan company you are talking to) and the rates you are offered as a consequence.
If you fall into the self-employed category, this can cause some lenders a little difficulty because the usual applicant’s employment status is as an employed (and therefore salaried) individual. If you are employed this means there should be a well-documented series of monthly payments into your account from your employers. To a lender this trail is very reassuring – it means that you are generally good for a well-defined sum each month and they can plan accordingly. If you have a self-employed employment status then the payments into your account are irregular and often from very diverse sources. Some months there might be very little ingoings. Some months you might receive a considerable amount of money. There is sometimes very little about the bank account of a self-employed person that paints a stable picture for a lender, and this can lead to higher APR rates when they are offered a loan.
Of course, for someone with an unemployed employment status, the situation is concurrently less desirable.
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