An applicant is an individual or business seeking or requesting something like employment, assistance, or admissions. In the financial sector, an applicant is generally someone seeking financial assistance in the form of a loan.
Loan applicants have to pass a financial institution’s requirements for their loan application to be approved. These requirements vary depending on the type of loan (i.e. house loan/mortgage, car loan, salary loan, petty cash loan, etc.), the amount of the money to be borrowed, and the financial institution itself.
Obviously, large loans will mean more requirements and greater scrutiny of the applicant’s capability to pay back the loan, or financial standing and history.
Some of the common requirements and information looked into by financial institutions include:
• Monthly income – This is important so that banks can assess if a person is capable of making the regular payments required.
• Total assets and liabilities – This will give the financial institution a deeper look into a person’s actual financial standing.
• Credit card history (specifically payment history) – The credit card score of a person is affected negatively or takes a hit each time a person misses a payment. This information is very important for financial institutions in figuring out whether a person has good or bad payment habits. Even if a person has a high monthly income, if that person has a terrible credit card history, then she could get turned down for a loan.