Underwriting

Underwriting is the process of evaluating a borrower's risk and deciding whether to approve a loan. It considers credit history, income, debt, and collateral.

Underwriting determines loan terms such as interest rate, limits, and repayment period. Automated and manual underwriting are both common in lending. Underwriters review loan-to-value ratios and issue pre-approval decisions.

Related Terms

Credit Score

A credit score is a numerical rating that represents a person's creditworthiness based on their cred...

Debt-to-Income

DTI

Debt-to-income ratio compares monthly debt payments to gross monthly income. Lenders use it to evalu...

Loan-to-Value

LTV

Loan-to-value ratio compares the loan amount to the value of the collateral. It measures how much of...

Collateral

Collateral is an asset that a borrower pledges to a lender as security for a loan. If the borrower d...

Need to convert bank statements to spreadsheet format? Try our bank pdf converter to easily export your transaction data to Excel or CSV.

Glossary home

Convert 10 pages free per week.
Try your weirdest statement.

Convert a bank statement PDF free