For the bank, every person who has written a loan application is a potential source of profit. However, it is also a potential threat, because the bank does not know how diligent the borrower will be. In order to protect themselves, financial institutions conduct checks on applicants, finding out their financial situation and other factors that may affect their ability to pay.
The larger the credit, the more serious the checks
I must say that the level of verification will be largely determined by the amount that the applicant claims. So, if someone needs a small loan, then the check will probably be limited to the usual viewing of the passport and a cursory analysis of the credit history. Meanwhile, if you have to make a loan for a house or car, the study of the borrower will be carried out much more seriously.
For example, even information from the passport will be checked much more carefully. If the security service of the bank has any suspicions, it can ask for assistance from law enforcement agencies that have their own databases of fraudsters. In addition, to get a large loan, the borrower may need to bring even utility bills for the last 12 months to the lender for analysis. According to them, the bank will understand how diligently the applicant complies with their obligations, and what is the financial situation in your family.
In addition, when issuing large loans, the applicant may be interested in the presence of such valuable property as a car or any real estate in his property. Moreover, it is not necessary that it will become collateral, just the bank needs to make sure that the borrower knows how to plan their income.
Loan processing and borrower’s income
The main checks of the bank will concern the borrower’s income. The main way to confirm them is a certificate of earnings, which is usually filled out in the form of a 2-personal income tax form. However, when checking these incomes, the bank will be able to focus only on the information provided by the employer, since the reconciliation with the tax service will be quite lengthy.
Therefore, often, especially when making large loans, the financial institution also checks the place of work of the borrower. Not only that, but bank employees also call there with questions about whether such and such a person really works there. They can still find out what their colleagues think about a citizen trying to take out a loan.
If the company where the applicant works are small, and the salary specified in the certificate is unreasonably high, then even the company itself may be subject to verification. In this case, the bank’s employees will study the company’s Internet page, and even personal visits to the office are possible to make sure that this company is not “fake”.
Among other things, a financial institution can analyze the scope of the borrower’s employer, as well as the applicant’s specialty and position in the firm. The frequency of job changes by the borrower will not be ignored. Banks give their preference to those citizens who are not inclined to changes in their working life.
Reasons for rejections
When considering a loan application, banks must check the credit history of the person who applied for a loan. In it, the borrower will benefit from the absence of delinquencies on previous debts, as well as the fact that he does not have debts to other banks at the time of filing the application.
In addition, banks have an unspoken blacklist, which includes people suspected of fraud and those who have a tendency to constantly repay loans much ahead of time.