What is an alternative documentation?

Alternative documentation is a term used to describe any documents received by the creditor for the purpose of determining specific facts about the loan candidate. Documents of this type are often aimed at providing evidence of employment and some evidence of a permanent stream of salary, wages or income. The idea of ​​alternative documentation is to provide creditors with trusted documents confirming the information contained in the loan application. This can then help to speed up the processing of this application.

There are several commonly accepted forms of alternative documentation. One of the most common is the payout. The presentation of the stump for the last processed wage period allows the creditor to quickly find out how much net income the applicant for the loan will receive every paycheck and compare it with information about the annual loan application. In some countries, tax documents will also be acceptable as this type of support documentation, as well as the copies of bank statements.

Most creditors will require some type of alternative documentation either at the time the application is presented or at a certain point in the application. The scope of documents that may be required will vary, even if the majority will have to do with the identity of the applicant, which is the amount of income generated by the applicant on a consistent basis and a permanent address of the applicant. From this point of view, these additional documents help the creditors avoid certain risks associated with lending money, and also help the creditors make a more informed decision to evaluate the application.

Even creditors who provide short -term loans will often require some form of alternative documentation. For example, a loan on a payday loan may accept payouts as proof of income and will probably require a copy of the recent bill of the law of a check account to confirm the physical adreSon of the applicant for a loan. In situations where the applicant is self -employed, many of these types of short -term loans will accept alternative documentation, such as tax returns, revenue and expenditure and bank statements as a means of confirmation of identity.

The advantage of providing alternative documentation is that creditors are able to continue with the relative certainty that the applicant has provided accurate and complete information about the loan application. This in turn helps minimize the amount of time required to process the application and either approve or refuse it. From this point of view, alternative documentation allows the applicant to receive a response sooner or later and move forward with the next step in obtaining the financial assistance he wants.

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