Do You know why Lenders Ask for Your Bank Account Statement? Here are the Reasons
Jun 26, 2018 Home Loan
During the home loan process, lenders usually ask for a copy of your bank account statements for the last six months to few years. Lenders considered these documents as very important ones as such documents determine your home loan eligibility, ascertain your financial capabilities, activities, spending habits and also denotes whether you will be able to bare the loan or not.
The existence of any loan
Through your bank account statements, the lender can find out if there is any existing loan being serviced if some identical amounts are debited from your account at regular intervals. The existence of any such loan, help lender to decide on the loan eligibility amount for you. If there is any existing loan then it will reduce your overall home loan eligibility.
Account balance and debit activity
The balance amount in the bank reflects your financial health and your saving habits. If there are regular debits from your accounts for some mutual funds then it shows your saving habits and financial discipline. Nowadays people regularly use credit cards and debit cards to make online payments or purchases. These patterns help the lender to understand your spending habits. This further help the lender to determine your loan eligibility in relation to your income. Higher the payments or debits are seen in the bank account, more likely to reduce the overall loan eligibility.
Nature of your activities
In case of self employed people, lenders ask for banks statements of the account where the professional income or business gets credited. These statements help the lender to verify the nature and level of your business activity such as sales or receipts. They then compare it with the one declared in the income tax returns or in the loan application. It also helps the lender to check some transactions involving huge cash deposits and withdrawals. Huge cash deposits in the account create doubt unless the nature of business required such deposits.
In case of salaried people, bank account statements help lenders to verify that the salary mentioned in the income tax return is actually credited in the bank account. If the salary is seen getting credited month after month and the amount is also similar, then it means that the salary mentioned is genuine. And if the salary amount as shown in the income tax return is not seen to be credited month after month in the bank account statement then the lender consider such credits with suspicion.
Cheque returns bank charges debited from the account in case of bounced cheques or for those that are returned unpaid, help the lender to determine the number of cheques returned that are either deposit to your account or issued by you. The number of cheques deposited and returned, determines your profile, strength of his business and his financial status. However, if there is repeated case of cheque return then it could impact your chances of getting a loan as then the lender will try to avoid that person who issues cheques without being sure of adequate balance in his or her bank account.
In case of salaried people, bank account statements help lenders to verify that the salary mentioned in the income tax return is actually credited in the bank account. If the salary is seen getting credited month after month and the amount is also similar, then it means that the salary mentioned is genuine. And if the salary amount as shown in the income tax return is not seen to be credited month after month in the bank account statement then the lender consider such credits with suspicion.
Cheque returns bank charges debited from the account in case of bounced cheques or for those that are returned unpaid, help the lender to determine the number of cheques returned that are either deposit to your account or issued by you. The number of cheques deposited and returned, determines your profile, strength of his business and his financial status. However, if there is repeated case of cheque return then it could impact your chances of getting a loan as then the lender will try to avoid that person who issues cheques without being sure of adequate balance in his or her bank account.
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