Verified Document

Credit Application Analysis Term Paper

Credit Analysis Smehra Credit Analysis for Neal Harris

Neal Harris recently submitted his credit application for our consideration. Mr. Harris is 45 years old, married and has 2 children. He currently works at Franklin Industries where he has been employed as office manager for 2 years. Prior to that, he was in sales at Providencial Insurance for 3 years. Neal has resided at his current residence in Tennessee for 1 year.

His credit application has been filed in joint with his wife, Helen Harris, 43 years old. Helen has recently returned to the workforce from being a housewife. She is also employed by Franklin Industries where she has been marketing director for 4 months. Both individuals have a checking and savings account with AmSouth. The purpose of their loan is for a 2003 Chevrolet Tahoe. Following is a review of the 5 C's of Credit for Mr. And Mrs. Harris and conclusion for their loan.

Capacity

Upon evaluation of the Harris' credit reports, Helen Harris has no outstanding or prior outstanding credit. Neal Harris' credit report is concurrence to his application's list of obligations, which include a mortgage with Countrywide (monthly payment of $1,100.00), and an auto payment with Nissan, of an outstanding balance of $5,000. There are also two credit cards listed...

The Harris' total net income amounts to $4,250.00.
The Harris' should be spending no more than $850 (20%) of their net income on credit purchases. As shown in their application, this total amounts to $600 due in total to American Express and Visa. Discover card is listed as a credit card, but the Harris' have no balance with the company. The Harris' are currently paying $150/month on credit card debit, a total that is well below their 20% capacity. Coupled with their $150/month payment to AmSouth, the Harris' have sufficient capacity for a loan.

Character

Neal Harris currently has a mortgage with Countrywide and an auto payment with Nissan. His current balance for his mortgage is 150,000 ($1,100/month) and for the auto, $5,000 (175/month). In 2001, Mr. Harris filed for Chapter 7. According to his credit report, payments seem to be made in a timely fashion. The Harris' total annual income is $73,000, consisting of annual incomes and a supplementary income from Amway of $3,000. Upon review of Harris' credit report and financial form, his current liabilities lie at $159,900. He appears to be paying his debts off in a timely fashion in accordance with his monthly salary.

Capital

The Harris' have an annual income…

Sources used in this document:
Conclusion

After reviewing the joint credit application for Mr. And Mrs. Harris, I have drawn the conclusion that they should be granted the loan under the terms listed. These are for a loan of $24,000, repayable over 48 months at 4%, minimum monthly payment of $540. While Neal Harris has on record a Chapter 7 file in January, 2001, review of their assets and liabilities reveals that they are suitable candidates for this loan. They also demonstrate timely repayments to their current obligations which include a mortgage with Countrywide, an auto payment with Nissan, and 4 credit cards, one of which is currently at a 0 balance.

The couple is also within the 20% average for credit capacity- net income, and have also demonstrated that they will be able to take on the extra expenditure through this loan through their supplementary income listed. I recommend that AmSouth give Mr. And Mrs. Harris their requested loan under the conditions mentioned.
Cite this Document:
Copy Bibliography Citation

Related Documents

Credit Swaps
Words: 2960 Length: 10 Document Type: Term Paper

Credit Swap, also known in some circles as a Credit Default Swap is one of the most basic credit derivatives. Here in this transaction, one party called the Protection Buyer in return for a payment by the other party called the Protection Seller makes a periodic payment, which is dependent on the happening of some agreed-upon event that is related to an original credit. To quote a simple example that may

Credit Risk in Banking in Agreement With the Basel Accords
Words: 13816 Length: 50 Document Type: Thesis

Credit Risk Management Banks are an important part of the economy of any nation. Traditionally, the banks operate as financial intermediaries serving to satisfy the demand of people in need of various forms of financing. Through this, banks enable people to purchase home and businesses to expand. These financial institutions therefore facilitate investment and spending that are responsible for fueling the growth of the economy. In spite of their vital role

Low Incoming Housing Credit
Words: 1797 Length: 6 Document Type: Term Paper

Low Income Housing Credit The low income tax credit has been an issue of debate since it was created. Many believe that the federal government should do more to help the working poor gain access to affordable housing and that the current plan is extremely convoluted making it difficult for developers and tenants to comply with. The purpose of this discussion is to define and describe the low income housing tax

Understanding the Factors Affecting the Success of Credit Risk in...
Words: 3237 Length: 11 Document Type: Research Paper

Introduction The banking business sector is enormously impacted by the perceptive and imperceptive factors in an intensely competitive environment. In recent times, this competition has stiffened all the more with the advancement of globalization. In each regard of their business operations, banks ought to take effective measures in order to diminish risk by pinpointing the prospective causes based on real-world circumstances. Imperatively, the banking sector is deemed to be a significant

Automobile Internet Industry Analysis
Words: 2303 Length: 8 Document Type: Term Paper

Marketing Techniques That the Automobile Industry Uses on the Internet The purpose of this discussion is to provide an analysis of the various marketing techniques that the automobile industry uses on the Internet. We will explore sites of automobile manufacturers and seek to understand how car manufacturers use marketing strategies to attract customers. Our investigation will also reveal the best and worst Internet sites that the industry has to offer. The advent

Credit Crunch on UK Residential
Words: 9799 Length: 30 Document Type: Dissertation

While it was generally agreed that the increase in prices was due mainly to an insufficient offer as the stock house was limited, opinions have also been forwarded according to which the buy-to-let purchases have contributed to the inflation of the house prices (Property Mark). The debate concerning the reasons for the massive price increases for residential properties (materialized mostly between 1996 and 2005) is however still ongoing. On the

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now