bank risk class ratings ( d, e, f )

SECTION 2
High Risk Loans

bank risk class rating ( c, d )

SECTION 3
Moderate Risk Loans

bank class risk rating ( c, d )

SECTION 4

standard loans

bank risk class rating ( a,  b,  c )

     

The customer will be disqualified for a loan if they have no physical address.  The customer must have some place where they can be contacted by phone or mail, a rare exception would be a retired person traveling in their motor home, this type of loan would usually be secured by other collateral on deposit at the lender.

No Phone No Loan.  Most lenders will disqualify a loan if they do not have a method of contacting you.   If you don't have a phone, who can the lender contact you through; a friend , a neighbor, a relative or a co-worker.

Do you have a current and valid license? Its possible to buy almost anything without a drivers license, with the exception of financing an automobile. But if the customer does not have a valid drivers license it raises a big red flag encouraging the loan officer to do a very strict investigation.

Is the customer new to the area, do they have any relatives in the area. Is the customer self employed? Is it possible to verify the income?  If a customer brings in tax returns most lenders will never verify them with the IRS.  This has been a growing area of fraud as customers submit tax returns which are not the same as those actually submitted to the IRS. I would  expect lenders to tighten their verification procedures due to recurring losses.

VERY HIGH RISK LOANS

Structured as a lease, anything is okay with a good down payment ( classified as 20% or more of the purchase price) Since the transaction is structured as a lease, open BK's, open federal tax liens,  judgments, and open collections are all okay.  No credit, ghosts, aliens, abducted by aliens, anything goes here ( sounds like fun doesn't it). The key here is that the you are not the true owner until such time as you are eligible to exercise the purchase option ( if ever).

Criteria for Loans:

income less than $1500.00 per month,

Equifax beacon score between 300 and 525

proof of residence,  proof of insurance,  valid drivers license

minimum $300 dollar down payment

collateral must be resalable, no unusual office equipment, high maintenance vehicles, high mileage vehicles, collateral must be less than 15 years old with the exception of a home or land.

This type of loan will normally have a first payment default clause, and will be enforced strictly on  any late payments ( reposes first ask questions later)

maximum loan amount will be near wholesale value

HIGH RISK

gross monthly income of at least $1500.00, debt to income ratio less than 45%, payment to income ratio less than 15%

no major problems after a bankruptcy or repossession

must score at least 35 points on the following list:

time on job: less than a year =(0) 1-3 years =(5 points) over 3 years =(10 points)

time at residence: less than a year=(0) 1-5 years = (5 points) over 5 years =(10 points)

telephone in residence: no= (0) yes= (5 points)

down payment, commitment to loan: less than $600.00=(0) $600.00-$850.00=(5 points) over $850 = (10 points )

Residence: mortgage=(10 points) land contract=(5 points) rent (0 points)

debt ratio and Payment to income ratio: good=(10 points) average=( 5 points) poor =(0 points)

if your score is over 35 points you qualify for a loan of wholesale value on merchandise or equipment that is less than 6 years old, exceptions for homes or land.

MODERATE RISK

earned income of over $2000.00 per month

a minimum 10% down payment

Equifax beacon score over 525

verifiable residence, must score over 40 points on the previous scale

maximum loan not greater than wholesale value, all previous stipulations apply.

STANDARD CREDIT LOANS

refer to the 3 c's