How do lenders verify the information provided in loan applications?

Lenders follow a structured verification process to ensure that the authenticity of the information provided in loan applications. This typically involves:

• Document verification: Checking identity, address, and business proof documents such as PAN, Aadhaar, GST registration, and business licences.
• Financial assessment: Reviewing bank statements, income tax returns as well as financial statements to assess the business’s financial health.
• Credit check: Analysing the credit score of the applicant(s) to determine creditworthiness.
• Field verification: In some cases, lenders may conduct site visits to verify the existence and operations of the business.
• Cross-checking references: Contacting references or checking business registration details with relevant authorities.