Application for Credit

From Financial Literacy Wiki

Application for Credit

When applying for an open credit account or a loan, you must submit an application form that is available at any branches of the financial institutions offering the credit or loan. The form usually require you to provide information about your personal particulars, income earned, employer, assets and liabilities, existing bank accounts and open credit accounts.

Creditors often require applicants to submit their income tax statement, pay slip or IR8A form to ascertain their gross salary earned the previous year. These documents allow the creditor to make an assessment of the applicants ability to service the credit or loans extended.

Once the application have been received, the creditor assesses the applicant's credit risk. If the applicant is judged to be creditworthy, the creditor will approve the credit and inform him of the spending limit if he is applying for charge card and bank credit card, and/or credit limit if he is applying for bank credit card and overdrafts, and loan amount. Documents that needs the applicants to sign to activate the loan will be given to the applicant as well.