Introduction
Credit approval is a process through which a business has to undergo, so that it can become eligible to apply for a loan. Whether to approve the in credit or not is dependent upon the decision of the creditor who is going to lend money. He will surely assess whether the debtor will be capable enough to pay him back after the decided period. The debtor will have to return the money along with the interest that will accrue upon it. Therefore, these businesses and also individuals seek for these loans and their approvals. Once the in credit approval process is completed the business will receive his loan money which he will have to return after a certain period, decided between the debtor and the creditor.
History
Credit is a Latin term which in Latin means trust. This means in credit is basically an implied condition decided between the debtor and the creditor that he will be repaid. Previously, creditors used to avoid interest due to their religions prohibiting it for them, however, in today’s time, there is nothing of this sort and interest is something very common and is being taken by people of all religions in the name of profit. Previously, people used to lend money to their friends on the basis of trust without any collateral; however, if the friend turns out to be deceitful the person loses his asset.
Features
There are three types of loans, short term, long term and equity capital funding. The first is taken for a year or two, these loans are granted on the basis of the borrower’s signature without any collateral, and it is purely on the basis of trust. The second is the long term in credit, which is repaid through the earnings of the individual or business over time and is taken for a longer period, these loans are much more secure and they guarantee repayment on the basis of collateral. When the debtor’s starts to miss repayments, the creditor can possess all the assets pledged, however, it is not as easy as it seems and is quite difficult to possess an individual’s assets if he starts to miss payments. The last type is the equity capital funding and in this the interests and shares of the company are sold in order to raise money.
Tips and comments
In today’s time it is quite difficult to investigate each and every business and the in credit record therefore, many banks use the services provided by a credit bureau which assess rating of the applicants. If you are looking for a job in a credit approval department, look for one in a good bank, which has a huge customer base because that bank will then pay you high. If you find a job in a good bank you will get to learn a lot more, because the bank will have a huge influx of new customers asking for loan, therefore the more you will learn, the better you will become, therefore seek a good job in a good bank of international standing.
