Prerequisite For Applying For Loan
The various types of loans are students loan, refinancing, home loans etc. In case of students loan the prerequisite or instructions while applying for loan is that the student should provide the student aid report, complete entrance counseling and given the consent form for applying loan. It is important for a student to have completed the entrance counseling to enter into the college and while applying for loan facilities.
In case of home loans or other types of loans the various requisite is that the borrower must have the following documents in hand while applying for the same. They are as follows: a. Credit authorization reports i.e. the borrower must have a good credit rating b. should have filed tax returns and have copies of the same. c. If the individual has a rental property then the rental agreement must be produced. d. In order the quicken the process of loan application the individual can provide his bank statements e. In case the borrower is going for refinance facility he must aptly state what he intends to do with the money. f. If the borrower is divorced then the divorce decree must be provided such that the liability of the borrower is known. g. If the borrower is not a citizen, then proof of his green card must be given. All these information helps the organization or the lender to judge the creditability of the borrower and if he would be able to repay the loan within the said time, if not what is the security that can be used to retrieve the same.
While applying for the various loan facilities the forms contain various questions like details on the borrowing amount, repayment period, payment protection, insurance facilities, whether it is a single or joint loan application, current value of the property, outstanding on the mortgage, monthly mortgage payment, annual salary of the household. These questions also help the lender to know more about the borrower and his credit worthiness.
These instructions are strictly adhered to in case of banks and other financial institutions but when one or more of the requisites are faulty then the institutions refuse to lend, this is where the private lenders and the brokers come in. They offer loans from various sources at a higher rate and security like property or house. These private lenders and brokers take a risk but they charge a higher fee for the same.