What Is a Loan Condition?

A loan condition is something additional that lenders will require from time to time of their potential borrowers. Here are the basics of a loan condition and how it works.

Loan Condition

Before a loan can be approved, it is going to have to go through an underwriting process. During the underwriting process, the underwriter is going to evaluate your application to determine if you are worthy of a loan. Sometimes, the underwriter finds something in your application that requires more information for them to make a decision. They will then issue a loan condition that states they want some type of additional information in order to process the loan application.


The terms of a loan condition can be unorthodox and seem a little bit strange when they are issued. A loan condition could be practically anything that the underwriter deems as necessary. For example, they might ask to see your last four tax returns. They might want to see the last year of pay stubs or bank statements. Even if the information that they are requesting does not seem relevant to you at the time, they will still want to get access to it. If you want to get the loan, you will provide them with what they need.

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