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Banks and financial institutions check the bank accounts of the loan applicant to get an idea of their financial history.
Mr. Faisal is a 36-year-old business owner from Dubai, applies to one of the best personal loans in Dubai. He wants to expand his business using the capital from the personal loan.
The bank requires him to submit his loan application along with his bank account statements that depict his transaction history for the past six months.
When Mr. Faisal enquired as to why actually did the bank wanted to verify his bank account statements the loan officer explained to him, that there are certain eligibility criteria that the debtor needs to meet in order to avail the loan.
The bank statements act as the source of these details and provide an insight into the financial history of the loan applicant. There are mainly four reasons why a lender checks your bank account statements.
Before the bank moves on to processing your loan application for the best personal loan in Dubai, they need to verify that you are the same person you say you are. Bank account statements include your trading name and identification details that are vital for further underwriting.
Your financial history is one of the major reasons why a lender looks into account statements. Your transaction history over the past few months provides a clear picture of financial status.
Evaluating your transaction history allows banks to get an idea of your average daily bank balance along with daily deposits.
Banks analyze the degree of risk associated with lending money before approving the loan application. The track record of loan applicants with debts in the past provides the best banks for personal loans in UAE a projection of repayment.
Your account statements and credit report shed light on your creditworthiness, which allows banks to determine the degree of risk associated with lending capital.
Apart from all the above factors, banks often require applicants to provide details about employment and source of income, or even residential address.
Banks and financial institutions approve loans on the basis of various criteria that include assets, savings, income, and most importantly creditworthiness.
Personal loans are unsecured hence do not require proof of deposit, however, in the case of home loans or mortgage loan applicants need to submit proof of identity. The main reason behind it is that banks need to verify that borrower has capital equivalent to the loan amount in any form.
Another point to be kept in consideration when it comes to verification of bank account statements for approval of the best personal loan in UAE is VOD i.e. verification of deposit. These are the forms that are filled and completed by the financial institution when your loan is approved.
Your personal information is safe with the banks and they are not allowed to disclose any of it. However, if you are still cynical about your banking information you can go for lending agencies that approve your loan by reviewing the deposits only.
Your bank account statement does another important job, it reveals all the payment guidelines that you missed and the all bounced cheques. It is important for you to be prepared with a satisfactory answer to the financial institution as they might enquire about it.
Best banks for personal loans ins UAE will do a detailed assessment of your bank account to observe your payments into and out of your account. This will help them to identify any suspicious transactions.
In a Nutshell
Debtors should choose those banks/financial institutions that have limited policy towards sharing of information which will ensure that your personal information is safe and is not shared with any third-party. Furthermore, borrowers should be cautious while sharing sensitive financial information over mediums like text messages or emails.
Try to share them either on-call or vocally to avoid the wrong use of it. With this, we hope now that you’ve understood why banks and financial institutions verify bank account statements when applying for the best personal loan in Dubai.