Why banks offer different loan terms for similar incomes

This article explains how banks decide who gets a loan.

Many people think banks only look at your salary, but that is not true.

Banks also check how well you paid back money in the past.

If you always paid your bills on time, banks trust you more.

They use something called a credit score, which is a number between 300 and 900.

Banks also look at loans you are already paying.

If you already pay a lot every month, they worry you cannot pay more.

Your job matters too; people who stay at one job for a long time seem more reliable.

Even people who use too much of their credit card limit can look risky.

So two people with the same salary can get very different loan offers.