In the process of applying for a loan at a bank, credit appraisal is one of the most important stages. Credit appraisers with extensive experience, after performing professional operations, will make a decision whether to lend to customers or not. So what is credit appraisal that plays such a huge role?
What is credit appraisal?
It can be understood that credit appraisal is the process of people checking and assessing how risky and reliable a project is, whether it is able to repay the loan or not, thereby making a decision that will give credit. whether the project is eligible for a loan or not.
What is the purpose of the credit appraisal process?
The ultimate purpose of credit appraisal is to accurately assess the customers ability to repay in order to minimize the risk of capital loss. To see the importance of credit appraisal, some points can be noted:
• Help assess the reliability of production or investment projects of production plans or investment projects that customers have prepared and submitted to the bank when doing loan procedures.
• Analyze and assess the risk level of the project when deciding to lend.
• Helping credit officers and bank leaders to boldly decide to lend and reduce the probability of two types of mistakes in deciding to lend a bad project and refuse to lend a good project.
Classification of credit appraisal
Before starting credit appraisal with a mortgage or unsecured loan application, the bank will classify the credit appraisal to help the assessment and analysis process take place most accurately and quickly, helping customers goods save a lot of time. There are four types of credit appraisals:
• Risk assessment
• Appraisal of collateral
• Short-term credit appraisal
• Long-term credit appraisal
What is the 5C rule of credit appraisal?
The 5C Rule is a set of rules that are applied to the due diligence process. Banks often apply the 5C rule to the credit appraisal process to be able to solve the problems that occur in the credit appraisal process in the most optimal way. The 5C model includes:
• Character - Prestige, customer ethics
• Capacity – Capacity
• Capital – Capital
• Collateral – Collateral
• Conditions – Environment
Prestigious - professional appraisal unit:
Hoang Quan Appraisal is currently a strategic partner associated with Financial Institutions with more than 20 prestigious banks at home and abroad such as: VIB, Vietcombank, Vietinbank, BIDV, OCB, MSB, Agribank, Sacombank, Techcombank , SHB, ANZ, HSBC, Siam Commercial Bank Public, Woori Bank, Standard Chartered Bank, China Construction Bank, Bank of India, Shanghai Commercial Savings Bank,... creating the best conditions when customers have demand for collateral appraisal for a bank loan. The cooperation agreement between HQA and the banks defines the long-term cooperation relationship between the two parties and is committed to providing customers with the best Valuation service.
