Recently, SBI underwrite Adani’s loan. I want to know, what is loan underwriting? What are the obligations of a loan underwriter?
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Loan underwriting is the process of evaluating a loan application to determine whether the borrower meets the lender’s standards for the loan and to assess the risk involved in lending money to the borrower. This includes reviewing the borrower’s credit history, income, assets, liabilities, and other financial information to determine if they have the ability to repay the loan. The underwriter makes a recommendation to approve or deny the loan based on their analysis. The goal of underwriting is to minimize the lender’s risk while also providing a fair loan to the borrower.
The primary obligation of a loan underwriter is to thoroughly evaluate a loan application to ensure that it meets the lender’s criteria for approval. This involves:
In summary, a loan underwriter is responsible for thoroughly evaluating a loan application to ensure that it meets the lender’s criteria and that the lender is not taking on undue risk by approving the loan.