A wealth of loan options are avaible for consumers of every credit class. Traditional loans from large banking corporations are options for people who have good to excellent credit scores. Quick cash loans serve as emergency options for debtors who have poor credit. All debtors who are over the age of 18 have a right to apply for assistance. However, being realistic about the lending process is necessary for a successful transaction. A debtor must first calculate whether he or she can afford a loan.
A loan is nothing more than an advance of money that will eventually come into a debtor’s household. Therefore, the debtor must calculate the reliability of such income. The easiest way for a debtor to tell if he or she can afford a loan is to calculate his or her disposable income. Disposable income is the amount of cash that a debtor has left after he or she pays monthly expenses. If the person’s disposable income is $0, then he or she does not have the means to request an advance. If the person’s disposable income is a negative figure, then he or she most likely needs debt help.
A positive disposable income figure should be large enough to cover a loan plus the associated fees. The person should also be sure that he or she has enough funding to survive after repaying a cash advance.
Calculating disposable income is a quick process that only requires the use of a trusty pen and paper. The first step the debtor will take is adding up all his or her income sources. Income comes from legitimate jobs, part-time jobs, self-employment projects and more. The debtor may also use unemployment compensation, disability income, government assistance, child support, and alimony. However, he or she must consider the reliability of such income and the length of time that the person or organization will make such contributions. Total income is the figure that comes from adding up the various components.
The total debt figure is the sum of all household bills, creditor payments, memberships, business expenses and more. The debtor will subtract this figure from the total income figure to obtain the disposable income figure. The debtor should take an inadequate disposable income figure as advice to seek other lending options.