What a Lender Can Ask You & What They Cannot

Money’s tight and you need a loan. Before you can get the funds, you have to submit an application to see if you qualify. A lender can ask certain questions to determine your eligibility in this application, but there are some questions that are off limits.

What to Expect When You Apply for a Loan Online

Legitimate online loan companies like MoneyKey will ask you questions that confirm your identity and financial situation.

  1. To make sure you are actually who you say you are and not a bot or fraudster pretending to be someone else.
  2. To assess your creditworthiness, or the chances you’ll pay back what you owe on time. Creditworthiness is another way to calculate the risk they take by extending you credit.

To determine your identity and your creditworthiness, they may ask you to supply the following information:

Age. You need to be the age of majority in your state to apply for a loan on your own without a cosigner.

Banking Information. You’ll need to supply a bank account if you apply for a direct deposit loan.

Contact Details. A lender will want your full name, social security number, mailing address, email address, and phone number. This info helps them check they can legally serve you as a customer. Next, this info gives them a way to contact you. Lastly, it helps them run a credit check on the right person.

Credit Check. A lender must ask your permission to run a credit check. This check will reveal your three-digit score, which lets a lender know how well you’ve handled personal loans and lines of credit in the past.

Debt-to-Income Ratio. Some lenders may want to see your outstanding debts and debt-to-income ratio. This ratio exposes how much of your pre-taxed income is tied up with existing loan payments.

Employment History. A lender may ask this to ensure you are gainfully employed with a stable and predictable income.

Income. Information about your income and pay schedule may help your lender decide if you can afford your eventual loan payments.

What a Lender Cannot Consider Under Any Circumstances

It’s important to understand why legit online loan companies like MoneyKey need to know these things, as it can help you recognize relevant questions in another application. Legitimate online loan companies will never base your creditworthiness on the following nine things.

  1. Age. While you may have to prove you’re above the age of majority, lenders cannot discriminate against borrowers above this age.
  2. Color. Your lender should never ask about the color of your skin.
  3. Good Faith Exercise. Lenders can’t deny you if you exercise your right to report them under the Equal Credit Opportunity Act.
  4. Marital Status. Your relationship status has no bearing on your creditworthiness, so your lender can’t ask about it.
  5. National Origin. Where you were born isn’t a factor, provided you are a permanent resident or citizen of the United States.
  6. Race. Like color, your race is not a factor in your creditworthiness.
  7. 7. Religion. What you believe (or don’t believe) cannot be used against you.
  8. Recipient of Public Assistance Programs. Lenders can’t discriminate against people who rely on public assistance programs for some or all of their income, including unemployment, social security, and supplement nutrition assistance program (SNAP).
  9. Sex, Sexual Orientation and Gender Identity. Lenders can’t make decisions based on your sex. And, as of March 2021, they cannot discriminate against your orientation or gender identity either.

Know Your Rights Before You Borrow

If a lender asks you any of the above nine things in an application, they’re breaking the Equal Credit Opportunity Act, a federal law that protects consumers like you. Report them and apply with another company.