Only someone who is rated by the bank as creditworthy receives a loan. In order to be able to check and assess this, the banks first require the prospective borrower to provide proof of wages or salaries in order to be able to calculate the real net wages. But a good monthly income alone is not enough. Many other factors (how income is made up, monthly costs) play a role in lending.
Calculation of real income
For the calculation of the available monthly income, special payments, overtime or overtime can only be taken into account to a limited extent. After all, when it comes to lending, it is only interesting whether the regular income is sufficient to be able to meet your financial obligations. Likewise, all costs, whether for rent, utilities, living expenses, or possibly leases, must be deducted from this income and calculated to find out whether the rest is sufficient to cover the monthly credit installments.
The applicant may also be subject to a garnishment. This can also be seen from a payroll statement. Now the household bill for the loan that the customer has applied for from the bank begins.
How are household costs calculated?
In the so-called budgetary account, the bank’s clerk makes a list of both the positive income and the monthly costs of the applicant. However, it is a misconception that only rent, utilities or insurance contributions are included in this calculation. The daily cost of living must also be taken into account. After all, it is of interest to both parties whether the borrower is really able to pay the monthly installments due later.
Since the majority of applicants can hardly or not at all estimate these costs, lump sums are taken into account for the loan in the household account. These lump sums (whether for food, telephone costs, internet or personal hygiene or cleaning agents) are calculated by the bank employees, for the first person living in the household, between 650 and 700 USD per month. For every additional person living in the household, regardless of whether they are an infant or an old man, the household bill will charge 200 USD for a loan.
Since these amounts are quite high for the individual living in the household, it is not surprising that many loan applications are doomed to fail. With an estimate of 1250 USD per month for a household that includes five people, plus the normal rental and ancillary costs, the least wages are purely mathematically sufficient to also meet the liabilities in the form of monthly installments.