|Methods and techniques|
Loan application (credit application) s a document sent to the lender, which contains all relevant information about the borrower. An application for a loan consists, for example, of financial status, personal data, type of work performed and amount of earnings, information about other loans. The potential borrower is checked for solvency and whether he is not on the list of debtors . On the basis of an application (information found in it) for a loan, the lender makes a positive or negative decision for a person who wants to borrow money. The lender decides to grant a loan or presents to the potential borrower arguments for which it is not possible, in such a situation people who need money often decide to pay a "payday loan". Which does not mean that we will receive them even if we do not meet any of the required criteria. In the case of an industrial loan, the loan application usually includes an operating plan, action plan, initial project, projected income and expenses, return on investment (ROI) and other detailed information. It may also include a balance sheet, cash flow statement or a profit and loss account. Most loans are borrowed for a specific purpose and the borrower can not use them in any other way. He must strictly stick to the rules of the contract he has signed. In the case of consumer credit, the application for a loan is usually much shorter and contains significant data on the financial situation of an individual, and sometimes and / or a close family. In the case of large loans, for example related to the purchase of real estate, additional documents may be required. This is caused by a wider analysis by the lender, reducing risk and increasing the certainty of decisions.
Granting loans in respect of female and male sex
The behavior of officers of banks granting loans to women and men, unfortunately, are completely different, despite equality. Unfortunately, there is no legal evidence of discrimination against the female sex on the banks' side. This can, however, be explained by the supply of undesirable practices. Banks are afraid that women will not be able to cope with the risk and in the worst case with the burden of indebtedness of the enterprise .
Credit scorcing is the most important point regarding making a decision on granting a bank loan. It consists of such processes as:
- etting informations
- rocessing information
- information classification
Based on them, the creditor bases his decisions on granting the loan. Hand & Jack said that "" the process (by financial institutions) of creditworthiness is referred to as credit scoring " One of the definitions of "credit scoring" is the pricing of "credit" meaning "buy now, pay later" and "scoring" or "using a numeric tool to rank order cases according to actual or perceived quality in order to distinguish between them and ensure objective and consistent decisions. " The idea of a credit concept is to compare the features of various clients with each other, analyze and compare with the past tense, with the characteristics of the client who obtained the loan and with the characteristics of the client who did not obtain the loan. On this basis, the lender is able to make decisions.We can distinguish two types of assessment techniques: subjective assessment and point score. The type and level of assessment by the lender depends on the experience and knowledge of the credit processes. Often based on past experience. One of the benefits of credit scoring is the small amount of information needed to make a decision .
- Abdou, H., Pointon, J. (2011). "Credit scoring, statistical techniques and evaluation criteria: A review of the literature" Judgemental systems versus credit scoring systems, Benefits and criticism of credit scoring s. 2-8
- Behr, P., Guettler A. (2010). "How do Lending Relationships affect Access to Credit and Loan Conditions in Microlending? " Journal of Banking & Finance s. 2-15
- Carter, S., Shaw, E., Lam, W., & Wilson, F. (2007). --Gender, entrepreneurship, and bank lending: The criteria and processes used by bank loan officers in assessing applications. Entrepreneurship Theory and Practice, 31(3), 427-444.
- Behr, P., Guettler A. (2010).
- Carter, S., Shaw, E., Lam, W., & Wilson, F. (2007).
- Abdou, H., Pointon, J. (2011).
Author: Mariola Goc