Why Do Lenders Need Bank Statements?

By | January 16, 2010

If you are trying to get a loan at your local bank, then you have probably noticed that they place quite a few demands on you. They probably want to see some paycheck stubs, some tax forms, some forms of identification, and yes, several bank statements as well. But, just why would a lender want to see your bank statement? Isn’t that an intrusion on your own personal privacy? Isn’t what goes on your bank statement for your eyes alone? 

Well, a lot of lenders feel differently. In a lot of ways, bank statements are considered verification of not only how much you make, but also of your general spending and banking habits. These tell about overdraws, about paid fees, about how much you deposit from your paycheck, etc. This is information that helps lenders decide how high of a risk you are, and it is information that can make or break your lending deal. So, if that loan is really important to you, you might have to end up sacrificing a bit of privacy for the sake of the loan. 

Verifying how much you make through bank statements not only tells about how much you make from your primary job, but it can also tell them other things… like, say, how much you make from side jobs or from investments. And these things can actually help you get a loan, which is why providing bank statements for your lender might be key to actually getting them to approve.