Pre-approval: A Measure of Worth

2007-03-08 10:33:40

( Financial )



TWO TYPES OF PRE APPROVAL

Pre approval in financial terms refers to either one of two things: first, that you as a lender meet the necessary or basic financial conditions to qualify for credit should you decide to make use of it.

The financial company, by virtue of your public information sees you as low-risk, and therefore, makes them very willing to provide you instant loan approval if the time comes that you will be in need of it. Of course you are not in any obligation to take the financial product; it is just there for the asking.

The other type of pre approval more or less parallels the first type of pre approval; but this one is more specific to mortgage. If you are planning to get a car or house loan, you approach a lending institution which will check and verify your financial situation against specific benchmarks to determine your credit standing.

If they find everything is in order, the lending company will guarantee that you can get instant loan approval up to a certain amount. The lender will then issue a pre approval letter that you can show to the car or house seller to prove that you are good for that deal. This way, the processing of your car loan approval or house loan approval is made so much easier and faster.

SAME DIFFERENCE

These two pre approval terms are the same in as much as they are guarantees of easy approval of a credit product that you may want to avail of. The only difference is that the first is not solicited by your party; the company offers it voluntarily without any action on your part. The second type on the other hand is the type that you request for the purpose of taking out a home or car mortgage.

Pre approval is actually a reflection of your solid financial status. It is a statement made by financial institutions on your behalf that guarantees your capability to pay your loans or dues if you decide to get them.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.