What is the process called when examining the information provided by a loan applicant?

What is the process called when examining the information provided by a loan applicant?

• A. Loan Verification
• B. Pre-Qualification
• C. Loan Approval
• D. Application Review

Answer: (B)

The process of examining the information provided by a loan applicant is known as "Loan Verification". This step is crucial for lenders to ensure that all the data submitted by the applicant, such as income, credit history, and employment status, is accurate and reliable. During loan verification, lenders may contact employers, review tax returns, and assess financial statements to confirm the applicant's financial situation. While pre-qualification is a preliminary step where the lender assesses the borrower's financial situation and estimates how much they might be able to borrow, it does not involve the in-depth examination of documents that characterizes the loan verification process. Loan approval follows verification, where the lender makes a decision to approve or deny the loan based on the verified information. Application review can refer to an overview of the documents submitted but is not as focused on the verification of the details as loan verification is.

The process of examining the information provided by a loan applicant is known as "Loan Verification". This step is crucial for lenders to ensure that all the data submitted by the applicant, such as income, credit history, and employment status, is accurate and reliable. During loan verification, lenders may contact employers, review tax returns, and assess financial statements to confirm the applicant's financial situation.

While pre-qualification is a preliminary step where the lender assesses the borrower's financial situation and estimates how much they might be able to borrow, it does not involve the in-depth examination of documents that characterizes the loan verification process. Loan approval follows verification, where the lender makes a decision to approve or deny the loan based on the verified information. Application review can refer to an overview of the documents submitted but is not as focused on the verification of the details as loan verification is.