Assessment for Applying Loans
What do you think of when you hear the word of Banking and Credit? Most of you might be saying the money. Speaking of the credit, it cannot be separated from the purpose of banking itself called lending. The third party of target lending is the public or the debtor. Although the public becomes the main target in this regard, but not all prospective borrowers of loan application is approved by the banks. Credit report analysis determines whether your credit is approved or not. Some of you may have experienced rejection in the loan application and you must be wondering why your loan application is rejected even though you are qualified given by the bank. You need to know that there are many factors for credit analyst before providing recommendations to agree the debtor filing or not. They have standard formats and methods that must be fulfilled in writing with the form, format, and the depth of the specified bank. Besides, the analysis is not based on subjective considerations of the credit application.
To obtain information regarding credit applicants, characters from credit report can be obtained by collecting information from reference customers and other banks about the behavior, honesty, relationships, and obedience to meet the payment transaction. The method can also check credit histories in Bank. These characters are crucial for the good faith to pay their obligations. Analysis of the ability of prospective borrowers can be done by looking at the components of income borrowers. A credit analyst must be able to ensure that the applicant has other sources of income sufficient to pay its obligations under the agreed time period. Analysis in credit report is more towards capital assets owned by the debtor. Assets can be seen from the worksheet debtor company or survey the property owned by an individual debtor. The principle bank will not finance a prospective borrower who does not have their own capital or minimal wealth. An analysis of the aspects of these conditions include an analysis of the macro variables surrounding the company either variable regional, national, or international. Variables are considered primarily economic variables. Warranty is the final solution to close credit risk in case of default. Normally banks only dare to give a maximum loan ceiling of 75% of the value of loan collateral transactions.
The process of loan application can be submitted in writing by filling out the form and complete the required files. The file must be complete, true and accurate, and in many cases one file that is often overlooked is the document taxpayer identification number (TIN). TIN is important for banks to check the credit applicant’s financial condition. In credit report, you can see the condition of one’s wealth tax and the tax he paid such as borrowing large amounts but it turns out like renege on tax. Banks can cross check the TIN and file reports for credit application submitted. One of the important files analyzes the financial statements for debtor’s company or individual debtor’s paycheck separately. This document is important as concrete evidence for the analyst to perform calculations in a structured way. This report is important as analysts do cross check the applicant’s financial condition. After all the incoming file and the loan application is considered feasible, the bank will conduct field data collection related to both personal data and reputation and other matters relating to business borrowers from credit report.
In addition to the above analysis, bank analysts generally also apply other principles for lending appropriate money. Similar to the character, personality is more directed analysis of the life and hobbies and lifestyle to see the trend, for example the applicant’s hobby spree, most likely the application is rejected. Intended fund is the most important factor in credit analysis, not to borrow funds for a down payment of other loans. Bank will investigate why it was actually a loan. The principle of credit report must be fit for purpose whether in the category of consumer or investment and working capital. Prospect or potential purpose is business potential. It is the work done by debtor as a supporting factor analysis of the proposed loan borrowers. This principle is generally used when a debtor wants to find a loan for business development. Payment analysis aims to look and makes sure how the applicant pays the layaway plan. Applicants who do not have a mortgage are more easily accepted than those who have to pay another installment, such as vehicles. Pay off first installment then you can propose a new old new credit. Credit report analysts have formal analysis based on data from applicants and interview. They will classify the applicant in the capital, loyalty, and character. This method is useful to facilitate credit analysts in making a decision or refusal of the borrowers’ request. Ideal condition of course is the big capital or assets.
Now, you already know the work of credit analysts in assessing the appropriateness of your receiving a loan by knowing the credit report. By understanding the mechanisms of the current assessment of credit application, it will certainly help you to make a plan or strategy for your credit to be approved.