What is Project appraisal? Loan proposal considering factor is not same thing. Firstly we will know What is Project appraisal. Project appraisal is the process of assessing, in a structured way, the case for proceeding with a project or proposal, or the project’s viability. It often involves comparing various options, using economic appraisal or some other decision analysis technique. The entire project should be objectively appraised for the same feasibility study should be taken in its principal dimensions, technical, economic, financial, social and so far to establish the justification of the project or project appraisal is the process of judging whether the project is profitable or not to client or it is a process of detailed examination of several aspects of a given project before recommending of some projects.
What is Project appraisal? Loan proposal considering factor
1. One credit History
Nearly all lenders look at someone credit score and report because it gives them insight into how you manage borrowed money. A poor credit history indicates an increased risk of default. This scares off many lenders because there’s a chance they may not get back what they lent you.
2. Borrower income and employment history:
Lenders want to know that borrower ability to pay back what borrower took. and as such, they need to see that borrower sufficient and consistent income. The income requirements vary based on the amount you borrow.
3. Borrower debt-to-income ratio:
Lenders like to see a low debt-to-income ratio, and if ratio is greater than 43% — so your debt payments take up no more than 43% of your income — most mortgage lenders won’t accept you.
4. Loan proposal considering factor depand Value of collateral
Collateral is something that agree to give to the bank if borrower are not able to keep up with your loan payments. Loans that involve collateral are called secured loans while those without collateral are considered unsecured loans. Secured loans usually have lower interest rates than unsecured loans because the bank has a way to recoup its money if you do not pay.
5. Size of down payment
Some loans require a down payment and the size of down payment determines how much money you need to borrow.
6. Liquid assets
Lenders like to see that borrower have some cash in a savings or money market account, or assets that can easily turn into cash. If borrower don’t have much cash saved up, he can not turned back while any financial crises arising in business.