All lenders have a policy that governs their consumer loans. This policy highlights the chief factors concerning the lending that they undertake as a financial institution. A policy will usually cover some or all of these areas:
Applications
The application made by you for the money. This usually includes personal details, work details, credit history, length of time spent at current residence etc.
The Purpose Of The Loan
You could be borrowing money for a variety of purposes and most lender policies will need you to specify why you need the funds. This could be for a car, education, health, household or any other personal needs.
Income Verification
You will be lent the money only if you can convince the financial institutions that you can pay the amount back. For this, they will verify your income, and as proof they’ll need documents like your pay stubs or tax returns or bank statements etc.
Credit Reports
A good credit history creates a good credit score. Most well known lenders will not let you borrow from them if you have a bad history of credit. Some include other terms and conditions in their policies which allow you to reapply after a certain period of time, once you’ve fixed your score up.
Collateral
Lenders will specify their T&C (terms and conditions!) for collateral. You may not need to provide security to meet certain lending criteria but for others, it might be absolutely essential.
Rates
All lenders will have policies that govern their interest rates (fixed and variable) and this will make a big difference to your loan.
Loan Terms
The terms on which the money is being lent to you are specified. This includes the length of term, rates and other criteria.
Penalties
Lender policies will usually specify penalties that are applied in case of late payment or inability to make the repayment.
Non-Discrimination
Banks and other financial institutions lend on the basis of credit worthiness and do not discriminate on the basis of race, creed, ethnicity, religious belief, sexual orientation etc.
These are the basic fields that are usually included in most consumer loan policies.