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No Income Loan - How to Qualify for a No Income Loan

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The majority of consumers will find a need to borrow at one point or another, and the necessity is not just reserved for individuals that are still working or have active streams of income. One of the most common elements a prospective lender considers when looking at an application is the amount of income that a borrower possesses, and it is from this that criteria is established to determine whether or not the loan is going to be too risky to issue. However, many potential borrowers that have a need will not qualify based on these lending standards a loan, and it may be necessary to qualify for a no income loan. There are a significant number of consumers these days that do not have an established source of income, and some of these individuals include those that are unemployed. Many more consumers are either partially retired or are living off of their assets and savings. Small business owners may not always be able to document income, and many widows have a hard time because of the lack of a steady paycheck. The following steps will help a person qualify for a no income loan.

Most lenders that offer some type of no income loan are primarily concerned with whether or not the money is going to be repaid. While a person without a steady paycheck may not be able to produce pay stubs, they can certainly present solutions that show the loan will be paid back. Any assets that are available should be detailed in depth on the application, and it is never a bad idea to actually include statements or other documentation that proves the existence of such assets. A prospective borrower should be able to clearly explain their proposed method of repaying the loan, and if all else fails, a lender is always impressed by a contingency plan. In other words, a borrower should be able to show the sufficient ability to pay off the loan in its entirety no matter what happens.

Although a lender that offers a no income loan is not going to require documentation in the lines of a pay stub, the credit history checks will probably be one of the most important parts of the application process. Because there is not much else to rely upon, a prospective lender will want to examine the pay history associated with previous loans. The credit score will prove to be a deciding factor that will have a strong impact on the loan, so it is imperative that individuals ensure that all of the data being reported by the credit bureaus is completely accurate. Any mistakes that are found on the credit report should be disputed immediately so that they show the proper status, and then a written explanation should be provided to the lender to negate any of the effects that the delinquency or error will have.

While the lending guidelines may appear to be somewhat strict, many exceptions can be made if the financial institution is comfortable with the borrower. It always helps to obtain several references that can be used on an application to show the integrity and honesty of the borrower. For business owners, a letter from an accountant can prove to be the deciding factor between an approval and a decline on the loan. Other individuals should not hesitate to explain their set of circumstances in detail, and gathering reference letters can be an excellent way to prove responsibility. Because most utility companies and landlords do not report to the credit bureaus, it can certainly help to obtain a credit reference letter from these types of sources. Anything that shows that the borrower is going to be responsible can prove to be helpful in the application process.

The good news is that a no income loan is not impossible to obtain, but it does certainly take a little bit more work on the part of the borrower than perhaps any other type of lending arrangement. The lender is going to be far more impressed if the individual wanting to borrow the money has taken the necessary steps to ensure that they are ready for the application process, and a consumer should not hesitate to provide as much information as possible.

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