Here Are The Few Important Things That Are Considered By The Lenders Before Giving The Approval:
• Income Of The Applicant
First and the foremost thing checked by the lenders are the steady, stable and reliable source of income. This is because, it is the one that help them to know whether applicants have the ability to repay or not. Usually, lenders check the pay in slip and bank statement of salary account to determine the worthiness of the applicant. Lenders offering high amount can also verify employment details by mailing verification of employment letter to the applicant’s employer. In case of self-employed loans, lenders check the personal and business tax returns, profit and loss statement and bank statements understand the income of the loan applicant.
• ID Proofs
Another thing looked into by the lender is the ID proofs of the applicant. They check it to ensure that lender is genuine and will not disappear anywhere before repaying the loan amount. Lenders look into the proofs to understand they are dealing with the right person and not a fraud.
• Credit Worthiness
Loan providers also check the credit worthiness of the applicant by undergoing their credit report and credit score from main credit agencies of the country. Verifying this detail helps them to know whether an applicant pays back their previous debts timely or not and to understand whether the applicant will pay back return their loan installment on time or not. People having blemished credit records and low credit rating usually face many problems while availing the loan amount. The credit worthiness of the applicant plays the deciding role of the loan approval.
• Current Debts And Their Length
Lenders are very much interested in knowing the current debts of their applicant because it helps them to know the debt to income ratio. Amount and length of the current debts assist lenders to understand the ability of applicant to bear the burden of the new loan amount. In case, applicants current debts are low and about to finish very soon then there are high chances of getting the approval.
• Value Of The Possessed Property
In case of secured loans, the value of the property plays a very important role because the borrower has to put it as collateral against the loan amount. Secured loan lenders check its value and offer the amount accordingly. Lenders offering high unsecured loans are also interested in knowing the property of the applicant as it assures them that if borrower become bankrupt then also they will get back their money through a court case.
Conclusion
These are the few things that lenders look into before offering the approval of the loan applicant. Verifying these things gives them reassurance that they are giving money in safe hands. Loan seekers who are about to apply for a loan must work out on the above mentioned factors to make sure they will get the loan approval.