Underwriting is the process a lender uses to evaluate a loan application and decide whether to approve it. The lender weighs the information provided against its lending criteria.
Underwriting is the assessment a lender performs to measure the risk of a loan and decide whether to approve it, and on what terms. Depending on the lender and product, underwriting may consider factors such as income, employment, ability to repay, existing debts, the credit report or score, and, for a secured loan, the value of the collateral. The process can be manual, automated, or a combination, and the criteria determine who qualifies and the rate, amount, and term offered. Approval, the amount, and the timing of a decision depend on the application and the lender's standards.
