Six out of ten people are always skeptical when financial institutions request their statement of account. Most of them often link the skepticism to the need for security. Statements of account are essential documents that financial institutions use to gauge a customers credit worthiness.
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What is a statement of account or a Bank statement?
A statement of account is a document drafted by a customers bank. It details the total amounts of what comes into the account and total of what goes out of the account. The former is called the credit transactions while the latter is referred to as the debit transactions respectively.
The statement also shows balances after each transaction and the information it carries. In another definition, a statement of account is a document that outlines the transactions between a buyer and a seller, a sender and a receiver. By listing every transaction between a business and a customer, a statement of account can be used to calculate an outstanding account balance.
READ MORE: These are the reasons why your loan application would get rejected
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A statement of account is very important in a loan process especially from a micro lender that doesn’t require for collateral. Lenders look at bank statements before they issue you a loan because the statements summarize and verify your income. They also take a look at your statements because it helps them avoid fraud and lessen their risk. Most lenders ask to see at least three months’ worth of statements before they issue you a loan.
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These are reasons why your statement is important in a loan process
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1. To be sure you are not living above your means
Money lending organizations review your statement of account to check if you spend your money on extravagant non revenue generating activities which include gambling, exuberant life styles, excessive spending and so on because these indicate a red flag to the lending company. People that engage in these activities have a high tendency of defaulting their loans.
Hence, lenders analyze the statement of account to find out, if the lender is an addicted gambler, a shopaholic, or a sybarite. Surely, these categories of people may find it difficult to repay back a loan and would cost the lending company a lot. Hence the importance of a review of your statement of account as it would save the loan company from risk.
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2. To verify your turnover
Your turnover is also what lenders seek to find out in a client’s bank statement. The statements show if you have had any inflow of income and the source of those incomes. This is also to verify that the lender has good credit balances. It would be weird if a person that doesn’t ever have money coming in seeks for a loan.
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3. To find out if you have a consistent cash flow
When credit balances are determined or it has been established that the lender at least has had money come into the account. The next thing lending organizations seek to analyze is the consistency of cash flow. Consistency in the dates of inflow will be able show an estimated time in which you will be able to pay back the loan. Loan companies need this information to estimate pay pack period.
For instance, if it is observed that every 25th of the month, there is an inflow of money either from an individual, dividend, or salary. The loan organization would feel secured that the loan requested for would be paid back in that period or closely after. Moreover, consistency of dates also aids the loan company to know when to automatically debit the account of an obstinate defaulter.
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4. To be sure you are not a serial debtor or a fraud
Another very important benefit of a loan company reviewing account statements is to check and verify if the lender is clean from all fraudulent activities like money laundering, financial crimes, et-cetera. Another fraudulent practice that some people involve in is that they take loans from organizations, they don’t pay it back and they clear all documents and delete links related to the loan, and apply for another loan from a totally different loan organization. They basically live their lives on unpaid loans. As a loan company, lending to such people is high risk.
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5. To be sure you have a reliable income
Typically, a financial institution will request for a statement to determine the stability of the borrower’s income. Most organizations request for a three month statement of account to check how often these funds come in. This enables the loan organization determine the lenders loan eligibility. An individual who has breaking sums of NGN 5,000 and NGN 12,000 credited into his account randomly would not be eligible for a requested NGN100,000 loan. This is because his bank statement has shown that he is not financially sound to the level of the requested amount. This even helps the lender to lessen the pressure of paying back an amount of that you ordinarily wouldn’t have been able to.
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Here are 3 ways you can get your bank statement very easily
- Traditionally
You can walk into a branch of your bank and refer to a customer care agent. He or she will then direct you to a form to be provide your customer data. Then an account statement will then either be printed out or sent via mail.
- Online
Log in to your page on the internet banking platform of your bank. Select your account type. Choose the account summary and input date. Click on download.
- Mobile codes
Now, using the unstructured supplementary service data (USSD) codes, one can also retrieve bank statements. dial the codes for your banks. You can click on this link for list of bank codes. Select other services/enquiry services/banking services. Select mini statement/statement. Insert your USSD pin.
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I am the lady with the numbers at OG capital. Graduate of accounting from Bingham university and a Business Valuation officer from CFI in view. Fun loving and kind. Living the life of christ
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