Question

IDENTIFY INFORMATION THAT YOU WOULD DEEM IMPORTANT FOR DECISION MAKING WHEN OBTAINING A LOAN FROM A FINANCIAL INSTITUTION.

Answer 1

Deem Important for decision making when Obtaining a Loan from a Financial Institution :

The lender need to ensure that company as well as Individual can repay of loan . Whole applying for loan amount , it tantamount given authority to Bank to verify credit history Always in every case Lender validate two important point : - a) Income position , nd b) calculate Debt servicing coverage ratio

In certain case mainly company , Bank asked for Collateral and they issued loan on the basis of collateral security . Collateral depends on the size of business as well as asset position of company . Bank normally review all tyoes of asset position like real estate , Business asset , position of Equipment , Valuation of the company . On the basis of collateral , bank issued Loan and in case not able to repay loan amount in future , Bank can seize this collateral asset.

Bank also review Companies capital Position while issuing Loan amount . Banl always do Risk analysis at the time of disburse of loan on the basis companies financial position , present debt position , repayment capacity . Bank some time take Personal Guarantee

One of the important factor is Environment , climate change . Bank need to verify whether position of Business is under risk or not due to change in Climate and Environment effect .

In case of Mortgage Loan , lender generally look into following factor:

1. Size of Down payment . In case of Mortgage loan , more money individual put down , the less burden of loan on Individual
2. Credit history , past payment plan
3. Working position – Service , Salaried , professional , nature of Income
4. Debt to income ratio - Most important ratio to calculate by Bank while issuing loan to Individual as well as Corporate
5. Nature of Loan

Normally Individual look for following loan :

Working Capital Loan – Line of credit

Commercial Short term Loan

Machinery – Equipment loan

Home loan

As already highlighted above , in any case m before releasing Loan , bank normally asked above question along with they also ask for Business Projection , some time Income tax return copy