In this world where expenses are way ahead than savings and investment, people are unable to fulfill their desires, dreams and wishes for example: some are working to buy a new house, some are working in order to buy a new car and so many other things are there which people try to attain and for the same reason they work day and night. Definitely in order to buy things and one has to maintain a suitable affordability otherwise it is impossible for anybody to cope up with such situation. So to solve this query we have financial institutions which provides the home loan broker Melbourne against collateral or loan for house and cars, numerous financial institutions are available out there which can be compared with each other, rates and tenure are different which creates a suitable environment for the client, since there is competition now one can expect a tie breaker interest rate very easily.

On the other hand there are financial institutions to earn from the same amount of money (after loaning it to the needy). Here is the deal nothing comes free especially when it comes to Melbourne mortgage brokers and loans. People take loans in order to get their dreams fulfilled and then they settle the loan by paying the set installments. Definitely there are certain rules which one has to follow in order to pay off the loan amount. Surely this deal is cool as it is the only way to get the lump sum money buys a house, or a car or anything needed and then pay off in pieces for the rest of the pay off period. This was all from the takers perspective but if we see the givers ( bank’s perspective) then there are some rules which they have to follow before approving a loan, things which they have to consider about the client before providing the loan papers for signing. So let’s see some of the basic principles which they have to follow:

Affordability: most of us might think that why would a financial institution think of affordability. But the rule is they have to know the affordability of the client. The basic and the only rule to set the installment amount is to fix the rule that installment amount must not be greater than 35% of the monthly income of the client.

KYC: KYC a term which is quite common and which is self-explanatory i.e. “know your customer” this means a financial institution rep. has to investigate what his/her customer is? How much he/she is earning? Number of dependents? Is there any other loan before this loan (for which he/she is applying)

So all in all it is not even easy to give loan, people usually think that it is tough to take loan but in real there are some tough rules which pertains to approval of loan amount.