What Is An Approval And Pre Approval Process? Define!
The approval process should be seamless and should be crystal clear to both the borrower as well as the loan provider. Thus, it is important to understand the basic of the approval and pre-approval process to avoid any kind of misconceptions and future risks.
The approval task can be cumbersome and sometimes the application is not even approved for the loan. The approval and pre-approval process ensures the lender’s willingness to lend the money and the applicant creditability to repay back the loan amount on time.
The approval task can be cumbersome and sometimes the application is not even approved for the loan. The approval and pre-approval process ensures the lender’s willingness to lend the money and the applicant creditability to repay back the loan amount on time.
Pre approval process:
When you apply for a loan, the lender demands certain documents related to your credit status and monthly income. The pre approval process starts with filling up a loan application with the decided loan amount and stated interest rates. For the pre approval; requirement, the applicants needs to provide certain details such as:
• Monthly income proof
• Bank statements
• Tax returns
• Proof of loans and other debt
• Social security number etc.
Lender make a check of your documents that you have been send to the lender at the time of applying. Based on that, you will gain the pre approval of loan. This is a stage before the approval process.
Pre-approval process basically means you have already conceded the approval process. In the preapproval process, the lender feels that the borrower is potential and credit worthy to take the particular financial product. In this process, lender judges the credit history and monthly income of the applicant who is interested in borrowing a loan.
After this, the lender will ensure the applicant that they would be liable to take up the certain loan amount by offering them a letter of pre approval of loan. The letter of pre approval that is issued from the lender is helpful to show your worthiness of getting a loan in the market. Pre approval letter shows that you are well qualified to take up the financing from the loan.
Approval process:
Loan approval process is a formal agreement of getting the approval of loan. Some of the important steps that are followed in the approval process are as follows:
1. The loan approval process starts with filling up of a loan application. Credit providers make every effort to collect all the pertinent documents to avoid any delays and pointless troubles.
2. Lenders order every required documents such as credit report, appraisal on home equity, employment status, pay stubs etc.
3. After that, the verification procedure gets started. Lender starts verifying the every document you have provided to them and may request for additional documents if needed.
4. Once the documents are verified and accepted, the lender will contact you with different loan programs to let you find a best rates and swift term loan deal for you.
5. The loan package will submit to the underwriter for an instant loan approval. Loan can be approved within 24 hours or next business day. The approval of loan is the commencement of closing of the loan process.
6. Everything is done and the lender will call the lender for signing the loan deal. The check will be issues in the name of the borrower or cash will submit to the bank account for quick access.
Loan lenders work with the aim of sending the cash in your bank account as soon as possible and with least formalities. To learn more on related content, visit@ 3 Year Loans
