Final answer:
A borrower's credit score is the critical factor banks consider when determining eligibility for a deposit-advance loan, more so than the ownership of an automobile or a savings account. Income sources, credit check, and potentially a cosigner or collateral are also evaluated by banks before approving a loan. A good credit score makes it more likely to receive favourable loan terms.
Step-by-step explanation:
To qualify for a deposit-advance loan, a borrower does not necessarily need to have an automobile or a savings account. While having a checking account can be essential for managing the financial transactions related to loan repayment, the most crucial requirement often considered by banks and financial institutions is the borrower's creditworthiness. This is typically gauged by the borrower's credit score, which is a reflection of past borrowing and repayment history. Financial institutions use credit scores to evaluate the risk of lending money and to decide whether or not to grant a loan.
Before granting a loan, banks require prospective borrowers to provide details about their income sources and conduct a credit check to assess financial reliability. Banks might also consider the need for a cosigner or collateral, such as property or equipment that can be seized if the borrower fails to repay the loan. These measures are ways that banks mitigate the risk of lending.
While having a savings account can be an indicator of financial stability, and a car could potentially be considered as collateral, it is not always required for a deposit-advance loan. Instead, maintaining a good credit score is more directly associated with loan approval, as it can influence the loan's terms and interest rates.