Factors banks must consider before granting or issuing loan to customers.

[PICKFORD]

The vast majority think that it is incredibly hard to buy another home without first acquiring a credit from a conventional bank. In any case, one thing you should comprehend is that advance endorsement is certainly not a straightforward cycle.
Most of individuals know nothing about the necessities for getting a bank to endorse a home advance. Banks are allowed to dismiss home advance applications in view of an assortment of variables, including record, rating, the standing of the home manufacturer, the area of a particular property, and, above all, the relationship you have with the bank. Well below are the factors bank consider before granting loan to customers:

1. Purpose of the loan:
the bank will want to know the purpose or reason why a customer will need loan if the loan is for a good purpose or profitable purpose, there is possibility that it may be granted.

2. ability to pay back the loan:
the bank is also interested to know the financial capability of the customer to repay back the loan at expiration if the customer financial standing of capability is low the loan might not be granted to him.

3. financial position of the customers account:
the bank will also study and analyse the financial position of the customer account to acceptable that loan can be given or not if at all it is for profitable purpose.

4. Sources of income to repay the loan:
when the loan is giving out the bank is interested to know the source of income available to the customer to repay the loan.

 

[Jasz]

Banks analyze many different factors before granting or issuing loan to customers. Some of these factors include:



Banks or financial institutions are to analyze the risk and credit. This involves analyzing a customer's ability to repay credit obligations by verifying the income, expenses, financial obligations such as mortgage, lease and automobile payments. The bank will look at the overall cost of credit they are willing to incur based on their net income.



Banks must ensure that the applicants for loans have secured source of income. Banks should also carry out a thorough background check on the applicant's credit history and criminal records. Banks also take note of the type of collateral offered by the borrower to secure the loan. It is not enough to just look at how much cash is available in the bank account. The bureau will only give adequate rating if they believe they are confident that the customer can pay back the loan, even in times of rough economic conditions.


Every bank has its policies when dealing with loan. These policies are being set up by the central bank. Every customer or client should be updated or inquire about theirs banks loan policy before deciding to take a loan.

 

[btaliat]

Banks don't just give out loans to their customers without taking into consideration some factors which may include the following.

The first fscrir that's likely to be considered by banks before giving out loans is to check the duration of the customers. Customer that have been banking with the banks for long stand a very chance here.

Banks will still sitll want to know the reasons for the loan. The major reason for knowing this is to make sure that there are much possiblity for the repayment of the money. If the reason is for business establishment, banks will need to study the feasibility studies.

The other factor that may be scrutinized is the collateral. There is need for banks to ascertain whether the collateral submits really worth it or not.

 

[Kingsley]

There are indeed alot of things a wise person must consider before lending out his or her hard ewrn money to mostly a stranger, let alone a bank be it microfinance bank or online loaning applications. Although we know that technically there is no country in the world today where they do not borrow or seek loans from either the world bank or IMF or from other countries. This is true for even the advance countries of the world, in fact in those advanced countries their citizens live off on loans and they are highly indebted. That said, loanshas show ober the years as the only way to get out of tight situations and the money that wise business people access are used wisely to create profit and increase business equity.

Hence for a bank to gallantly issue out loans they will first access all the books of account of the existing business, books like their balance sheet, their comprehensive income statement and they will also check their flow statement.


They will also request and check that the collateral that is been presented by the borrower, to ensure it can cover the amount the customer is requesting.

They will also check the customers account history with them.

 

[Sotherefore]

Nowadays if you are interested to get a loan from the bank , I believe the bank won't really care about your source of income but the most important thing they are likely to care about is just a collateral you can keep in place for the loan , that if you are not able to pay back the money you have collected they can easily use the collateral to get back the money they have given to you and this has been working perfectly.

Even if you have to go to the bank to request for a loan you need to have a collateral first and they have to verify that you are the real owner of the collateral ,I believe some of the property's documents might be within their control .

People who are really interested to get a loan from the bank have to understand that they must have a good reason why they are getting the loan because if you are getting a loan for the main purpose of establishing a business that won't really be profitable and if you are not able to pay back the loan you have collected, your your collateral might be at risk.