Finding a reliable lender for a loan can be challenging, especially when you're unsure about being able to pay back the loans offered to you. That's why responsible lending laws exist and are important for borrowers to understand.
Responsible lending holds lenders accountable so they don't give unsuitable loans to borrowers. This practice also keeps borrowers safe from loans lenders give, knowing the borrower can't afford to repay it.
Lenders must follow responsible lending laws to stay honest about their loan services. You can save yourself from falling into an unsuitable loan contract when you understand what responsible lending is.
What Are the Responsible Lending Obligations?
Lenders need to ensure they give you a loan that you can pay back and won't lead to hardship down the line. To determine your loan eligibility, lenders must follow responsible lending conduct obligations, which include assessing several financial aspects of your life, such as:
- Income
- Employment situation
- Existing debts
- Living situation
- Assets
- Fixed and variable expenses
- How many people are financially dependent on you
- Anticipated changes to your financial situation
- Other factors that could affect your ability to pay back the loan
To verify your income, lenders will request appropriate documentation like recent payslips, tax assessments, or other evidence of income activity. While many factors are included in loan applications, ensuring lenders assess your financial situation enables you to receive an appropriate loan. Responsible lenders will provide important information about credit products and services so the borrower can make fully informed decisions.
A conscientious lender prohibits the use of misleading, abusive, or fraudulent lending practices. You can determine if you're in an unsuitable loan contract if the lender keeps you locked to the contract or encourages you to increase your credit limit, despite your financial situation. A responsible lender will keep your financial situation in mind before offering a loan and will help you if you find yourself in trouble.
How Atlas Can Help
Atlas Credit is a responsible lender you can trust. We offer personal loans you can use to meet your financial needs. When you apply for a loan, we don't limit approval based on credit scores. We understand budgeting is important. That's why when we review your qualifications, we offer a detailed repayment plan that works with your budget.
You can apply for a personal loan online, over the phone, or visit us in person at one of our many branch locations throughout Texas, Oklahoma, and Virginia!
