Wednesday, February 24, 2010
i analyse loan propositions to come up with a credit decision...well, at least 'decision' for me right now is more of a recommendation as i don't have discretionary powers to decide...
i distinguish what we call the 5 C's...Character, Capacity, Capital, Collateral, Condition...and by that order shall my analysis be structured...
character is your creditworthiness and..erm..character (in credit sense that is..i don't care really if u don't believe in god)
here, i would ask questions like.."what's the guy's credit history like?" .. "how is the credit record of this company's directors?" .. "this guy a habitual defaulter?" .. "why does this guy pays his instalments late?" .. and i have customers personal reports to assist me..these reports are facts of the case..for example,
fact: report shows ur car loan is always overdue by 2-3 months...
story: "oo, this car is loaned under my name..but my brother is using it..he pays the loan"
then unless there is a way to prove beyond reasonable doubt ur story, the facts of the case read: this is UR loan for a car under UR name which U have legal obligation to pay...n U r not paying..meaning U r bad with paying back loans..
i also rely on other sources such as existing background knowledge (existing customer) and opinions given by colleagues or trusted persons, as long as the opinions are substantiated...experienced staff also are good at reading body language, reading between the lines, etc..
character is most important and thats why it is first of the Cs .. i don't really care what a person have to say about anything else but if it is proven that he is not creditworthy, its like showing many many doors but all locked with no keys. so, learn to handle some sort of financial commitment with banks early on..and don't be an ass if banks reject u coz u r no good in paying loans..
capacity is 2nd and almost equally important...it is the ability to service the loan..it can be from adequate to comfortable to non-existent..it is how much you earn vs how much u need to pay..it is about how profitable a company is or how well the cash generating ability...etc... (no, it does not assume u agree to consume instant noodles for the rest of ur loan tenure)
here, i would generally need income supporting documents...official documents that is credible and can substantiate how much you earn, and prove to me that what you claim to earn is true...for individuals, if u earn a fix salary, u'll have payslips, epf, bank accounts ... even if u don't get payslips, ur money must go somewhere, like a bank account..
u can tell me your grandma or grandpa's story about how much u earn and what sort of magic business u r doing that seems to be giving u abnormal returns, but if u can't prove it with acceptable supporting docs..its just not gonna work...
u can also tell me about how much u r going to get in the future when this becomes that, blablabla...but yea, what's the point if there's no evidence? but hey, banks do accept that uni graduates have better earning potential...and, at my bank at least, having a degree helps in some cases ;)
so that's pretty much the 2 most important things u can have in mind when u think about taking up a loan..of course, different loans require different depths of analysis and all cases are different...nonetheless, the above two C's will always be an integral part of the consideration process..
finally, banks (like yourself) are not charities...just use common, unbiased sense, and think..if u have millions of customers asking u for money (assuming u have the money)...what would you do? (hint: employ Sunny with awesomely crazy remuneration package)
aside from me badly needing to sleep soon despite how i can't get my eyes to shut now...the other 3 C's are kinda more technical and is usually a matter of compliance once the first 2 Cs are checked OK, hence, not worth my trouble writing and ur trouble reading unless u want to learn, which u dont need to coz friendly neighbourhood bankers like me exists...
contact me for honest help in credit..i don't promise i'll have the answer, but i promise i'll learn them up for u and assist u further..
Tuesday, February 16, 2010
Whoever Robert Jackson is, he makes good sense..
I'm taking this swipe at freedom of speech/press by exercising my own rights to freedom of speech..
No,i'm not against it..i'm just saying that a whole lotta ppl talking = a sizeable loada crap...
More dangerously, the pen IS mightier than the sword..put someone with a good ability to talk/write, with a dash of personality & humour, in front of an audience..n he/she will easily sway perceptions n his/her opinions/speculations will easily be taken in as truth..
So always question what u read/hear..doesn't matter how highly u hold the source in regard..which is why freedom of speech/media must exist so we have options..
and yea, unfortunately we'll hafta deal with more crap..not just written n spoken rubbish..but rubbish situations possibly caused by the rubbish written & spoken..
Oh,n physical rubbish in the form of more material to be consumed by more talking/writing.. ;-)
And now...i'ma gonna go google up "Robert Jackson"..
Saturday, February 13, 2010
credit to Namewee
Enjoy this very good & original song by Namewee!
You have to give it to him, he's spot on with his criticisms...but i think he'll agree that people shouldn't take it too seriously lah...we should all learn to laugh more at ourselves =)
HAPPY NEW YEAR to all FAMILY & FRIENDS...lets prosper together in health & wealth!