When a person seeks to take out a loan, he will generally be required to furnish the lender with a significant amount of information before the lender will allow him to borrow the money. This lender uses this information to determine the borrower's creditworthiness -- the likelihood that he will pay back any money loaned to him. The lender will likely request that the borrower provide him with a number of documents attesting to various aspects of his financial history.
Income
Most lenders will request that the borrower provide documents that speak to his current income. Lenders may request one or more documents, including check stubs from a recent date and tax forms such as W-2s, which indicate the amount of money that the person made within a given period of time. Self-employed people may need to seek other means of providing proof of income, such as bank account documents that demonstrate regular payments by clients.
Assets and Debts
Lenders often ask potential borrowers to show documentation related to their current assets and debts. This may include liquid assets, such as money in savings accounts and securities, as well as physical assets, such as houses and cars. Generally, statements from banks and financial brokerages will suffice. In addition, lenders will wish to see any documents indicating whether the loan applicant has any outstanding debts or pending creditor actions, such as liens on assets.
Credit History
Most creditors will pull an applicant's credit report -- a dossier of information about her past loans -- as a means of determining her creditworthiness. This report, used as the basis for calculating a person's credit score, includes records of loans and other forms of credit that the person has taken out in recent years, as well as whether these loans were paid back. This information is particularly important in determining the terms a person receives on a loan.
Use of Loan
Many lenders are unwilling to make loans to individuals without knowing the purpose of the loan. This is particularly true of business loans, but also for certain types of secured loans, such as loans used for houses and cars. In these cases, lenders will want to know the exact property or vehicle that the loan is being used to purchase. However, many lenders do not ask the loan's purpose.
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