CAP – Credit Appraisal Process
Identifying the right and eligible loan applicant is important but challenging !!! Credit disbursement is an important part of your business as a financial institution. One of the most important responsibilities of our organization is to provide loans to eligible and deserving people by using our CREDITONE Application. But how do you know if a person is applying for a loan? The organization is not aware of the financial eligibility of the applicant.
What information is obtained through a CAP?
1. Personal Information:
A person's name, date of birth, gender, multiple contact numbers, multiple addresses as well as government documents such as PAN No., Aadhar Card No., Voting Card No., Ration Card No., etc. Information you may receive. Based on this information you get an effective loan appraisal process.
2. Credit History:
Credit Score A person's eligibility for a loan and his ability to repay a loan is determined by his credit score. All Loan A / C Details Information on all loan accounts taken by an individual (on or off) is available here. Such as, Name of the lending institution, Type of loan account The borrower himself is the guarantor of the loan The loan ROI, Amount, Outstanding and tenure amount, loan installment NPA/Written off status
3. Credit Worthiness Vs Capacity:
In the context of loans and credit, creditworthiness largely refers to the financial characteristics of a particular individual. When a person applies for a loan, the institution checks the financial eligibility of the applicant to get an idea of his credit history.
4. Verification:
A lender’s credit appraisal process will typically check and evaluate the following important factors:
KYC
Age
Work experience
Nature of employment
Future liabilities
Tax history
Assets owned
Income
Repayment ability
Present and former loans
Other monthly expenses
Previous loan records
Financing pattern
5. Rating :
A lender needs to carry out a credit appraisal process to ensure that the borrower can repay the entire loan amount on time without missing any payment deadlines. This is very crucial for a bank as this determines the interest income and the capital of the bank. The repayment behavior of a borrower directly affects the performance of the bank. A credit appraisal is done to avoid the risk of default on loans.
6. Sanctioning : :
Once Credit appraisal process of appraising the credit for individual is done you can disburse the credit.