Some factors that bank managers consider before granting loans
Real Estate

Some factors that bank managers consider before granting loans

There are many factors that can influence the granting of loans by most Bank Managers and some of them are described below;

1. The type of Account the Client operates: Although non-owners obtain loans, loans are typically made to checking account holders rather than those operating savings accounts.

2. The Amount Involved: If it is a large sum of loan, the Bank Manager will consider if said amount is withdrawn, it will not affect the financial situation of the bank.

3. The client’s past financial dealings with the bank: One with strong past financial dealings with a bank has a higher chance of getting a loan and vice versa.

4. The purpose for which the loan will be used: Profitable projects are considered more purchased by bank managers to ensure that the loan will be used for projects that will generate profit so that the borrower can repay the loan.

5. The Collateral Guarantee Offered: These collateral guarantees that are fixed assets must be things that the bank can easily sell and more than the value of the loan granted.

6. The Payment Period: The payment period of said loan is very important because the Bank would not want your loan to be tied up for a long time even though the interest on the loan changes.

7. The Client Arbitrator: The arbitrator should be someone who is well known to the bank and who guarantees that in the event that the borrower defaults or becomes insolvent, they will repay the loan.

8. The purchasing power of the client: The person’s income compared to the amount to be lent are some of the determining factors in the granting and issuance of loans.

9. Sources of payment: Bank managers will also like to know the possible sources of the customer who intends to borrow to pay off the loan.

10. The Current Government Policy on Bank Loans: A Client may comply with all the “Conditions”, but if the government’s policy on loans is a credit crunch, the Bank will not grant the Loan and vice versa.

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