What Documents and Details Are Needed When I Apply For a Loan?
Gone are the days of walking into a bank branch, siting down with the Manager or Loan Officer, filling out an application for a loan, then waiting for the decision as to if the loan was approved or denied.
In some instances, the process could take days, and for a mortgage loan, weeks or longer.
Lenders now use credit scores and credit scoring, and if your credit score fits in with the lender’s guidelines for a loan, you are approved.
Almost all banks and lenders now have web sites, online and mobile banking, and apps and online applications to make applying for a loan not just easy, but also quick.
Many lenders can approve a loan in principle in an hour, and many will transfer the funds to you within 24 hours or less.
So times have changed.
However, even with the power of the Internet, online applications and banking, and mobile apps, there are times when a lender may require more information and details from you, and may ask for some documentation to support your answers and figures on the loan application.
And you can understand why, you are asking to borrow money, and the lender wants to insure they get the money paid back, and they need to make sure you can afford to repay the loan.
For some loans, such as guarantor loans, the lender will ask about your guarantor, and they may ask about the guarantor’s finances as well. So knowing who will be your guarantor, and having that person advised they may be contacted by the lender is always a wise move.
The majority of loan applications ask the following questions:
* Your details such as your name, DOB (date of birth) and title.
* Your address and post code, and how long have you lived there.
* Additional contact details, email address, mobile phone number, home phone number, and any work numbers you may have.
* Questions related to the type of job you have, your wages and how frequently are you paid.
* An income and expenditure statement showing all your income, and all your bills and monthly obligations.
For many lenders, once they have this information, and they can see you can afford the loan, and your credit score is satisfactory, the loan can be granted. Affordability and your credit score are big factors in being approved for a loan, and depending on the amount of loan you are seeking, these loans can be approved quickly, and without further details or documents.
However, there can be times, and for some larger and more detailed loans, or if a borrower is a higher risk, or may be just on the border of a loan being approved, the lender can ask for additional documentation to support the information you have given.
That documentation can be all or some of the following:
* Wage statements, showing your wages, and also the lender may want multiple statements to show consistency of your income.
* Award letters or documentation of any tax credits, benefits, or any other income you receive.
* Bank statements showing you have a bank account, and that it is in your name.
* Proof of identity, drivers license, Passport, or birth certificate or state identity card.
* Proof of address, such as a utility bill, bank statement, or tenancy agreement. This is where getting on the Electoral Role can be helpful. Lenders use this to verify your identity and address.
Unless you have listed a bill or account that seems to be unreasonably high or low, it is doubtful a lender would request any copies of bills to support your income and expenditure form.
As you can see much of what may be asked of you, or have you provide to a lender is basic, and makes sense, and again, for many loans, and if you have a sufficiently high credit score, you may not be asked to support your answers.
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