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The Recession Of The United States Economy

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As the U.S. economy continues its struggle to climb out of a deep recession, personal loans remain very difficult to secure. Having shouldered much of the blame for the financial hardships that have befallen consumers across the nation, many banks now require potential borrowers to meet strict criteria for an approval. With the financial institutions being more selective about who they assist, Detroit locals like Ashley Wright are learning that consumers with excellent credit and decent paying jobs are the most likely to make the cut. "Getting an approval was definitely a journey," said Wright, who was in search of a personal loan to help out with school and living expenses. Wright found that a private bank was the best place to turn for…show more content…
"I also tell them to make sure they start with a card that has a zero balance and to make sure they always pay it off in full every month," he said. "This will have a dramatic effect on anyone 's score." Lenders closely observe a number of factors when considering an applicant for a personal loan. Factors that heavily influence their decision are the prospective borrower 's assets and liabilities, a percentage known in the financial world as debt ratio. "Debt ratio is calculated by adding up all of your debt and dividing it by the amount of your assets," McCarthy explained. "Understanding this calculation can hopefully make someone aware of how they can lower their debt ratio. The best way is to simply pay down the debt you 've currently accumulated." When applying for a personal loan, borrowers often base their hope for approval on things like credit history and collateral. However, as McCarthy mentions, the size of the applicant 's down payment has a definite impact on the lender 's decision. "I advise my students to save as much as possible (when) preparing for applying for their loan," he noted. "Having a significant down payment is a big deal in the eyes of the lender. It shows you are willing to risk your hard-earned money on the purpose of your loan. It significantly increases your chances of getting approved. I always
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