Loan

The Loan Process

Here's how the loan process works: When someone needs money, they apply for a loan from a bank, corporation, government, or other entity. The borrower may be required to provide specific details such as the reason for the loan, their financial history, Social Security number, and other information. The lender reviews this information as well as a person's debt-to-income ratio to determine if the loan can be paid back.

Why Are Loans Used?

Loans are advanced for a number of reasons, including major purchases, investing, renovations, debt consolidation, and business ventures. Loans also help existing companies expand their operations. Loans allow for growth in the overall money supply in an economy and open up competition by lending to new businesses.