History

• When the national or global financial situation is difficult, lending policies at banks become more stringent -- banks are less willing to lend money, and borrowers must be ideal risks. Lending policies are looser when markets are good and money is being exchanged freely.
  
  

Types

• The most common type of consumer loan is a home mortgage. Automobile loans are another common bank loan. To obtain these kinds of loans, banks require a variety of assurances that the borrower can repay the loan. These assurances may come in the form of verified income or substantiated assets.
  
  

Policies

• Typical loan policies require that the borrow have a certain debt to income ratio, often 38 percent or less. The policy will require that income be verified and that the collateral, such as the home or car, be valued at a level that supports the loan amount through an appraisal or Blue Book comparison. Banks will order a credit check on each borrower, and the policy will determine what credit score is necessary to qualify for the loan. Policies also indicate what a borrower will pay to get a loan.