Version 1.0
Prepared by: @Lorraine Sebata
Approved by: @Feli Capron
Reviewed date: 2025-07-24
Next review date: 2026-07-24
This policy applies to all employees involved in the loan approval process, including Loan Officers, Risk Managers, and Senior Management, across all credit products offered by Easyterms.
The purpose of this policy is to establish a standardized and comprehensive process for evaluating and approving loan applications. This procedure ensures that loans are granted based on a fair, consistent, and thorough assessment of applicants' creditworthiness, while adhering strictly to all internal guidelines and external regulatory requirements.
This policy applies to all employees involved in the loan approval process, including Loan Officers, Risk Managers, and Senior Management, across all credit products offered by Easyterms.
To ensure a consistent, transparent, and equitable loan approval process for all applicants.
To manage and mitigate credit risk effectively, safeguarding the company's financial stability.
To ensure full compliance with all relevant national and international laws and regulations governing lending activities.
To provide fair and responsible access to credit for all eligible applicants.
All loan approval activities must comply with applicable laws and regulations, including but not limited to those stipulated by the Securities Commission of The Bahamas, and any other relevant financial regulatory bodies. The company is committed to upholding the highest standards of legal and ethical conduct in all lending operations.
The loan approval process commences with application submission and proceeds through initial review, detailed evaluation, decision-making, communication of the decision, and meticulous record-keeping. Each stage is critical to ensuring a robust and compliant lending cycle.
All loan applications will be evaluated based on the following key criteria:
4.3.1 Creditworthiness:
Assessment of the applicant's credit history and credit score obtained from a reputable credit reporting agency.
Evaluation of the applicant's debt-to-income ratio to ensure it falls within established acceptable parameters, indicating repayment capacity.
4.3.2 Employment and Income Verification:
Confirmation of the applicant's employment status and income through official documentation (e.g., job letter, pay slips) and verbal verification with the employer where feasible and permissible.
For employed applicants, it is mandatory to ensure that the employer provides an irrevocable salary deduction commitment.
4.3.3 Collateral Assessment (Auto Loans Only):
For secured auto loans, obtaining comprehensive photographs of all sides of the vehicle to be used as collateral is required to assess its suitability and condition.
Ensuring that the collateral meets the company's specific requirements and provides adequate security for the loan, legally formalized through a chattel mortgage.
Credit limits, interest rates, and associated fees for loans will be determined by various factors, including, but not limited to, the applicant's employer, age, and length of service. The total loan balances combined across all active loans will be considered when determining new credit limits. Specific tables detailing these factors will be maintained and updated by the Finance Department.
FEE | AMOUNT |
Administration fee | $100 + VAT |
Credit bureau search fee | $25 + VAT |
Mitigation fee | 6% of loan amount + VAT 8% + VAT for (private sector and government contract employees) 6% + VAT for (auto loans government) 6% + VAT for (staff) |
CRITERIA | ||
Minimum employment term | 1 year | |
Debt service ratio | 25 - 50% (employer dependent) | |
Deposit | 0% | |
Loan maturity limit | 2 years before retirement age or 5 years for RBPF, RBDF and BDOC | |
Acceptable payment methods | Salary Deduction | |
Interest rate | 19% | |
Maximum term | 120 months | |
EMPLOYMENT TENURE | CREDIT LIMIT | TERM |
1 year | $15,000 | 120 months |
2 years | $30,000 | 120 months |
3 years | $30,000 | 120 months |
4 years | $30,000 | 120 months |
5 years | $30,000 | 120 months |
Extended loan terms for Government employees
Applicants are allowed to extend their loans for up to 180 months, provided the loan is paid off by the time they turn 50 years old.
CRITERIA | ||
Minimum employment term | 3 years | |
Debt service ratio | 50% | |
Deposit | 0% | |
Loan maturity limit | 5 years before retirement | |
Acceptable payment methods | Salary Deduction | |
Interest rate | 19.95% | |
Credit limit | $5,000 | |
Minimum loan Amount | $500 | |
EMPLOYMENT TENURE | AMOUNTS | MAXIMUM TERM |
3 years | 5,000 | 12 months |
4 years | 5,000 | 24 months |
5 years | 5,000 | 36 months |
CRITERIA | |
Minimum employment term | 1 year |
Debt service ratio | 25 - 50% ( employer dependent) |
Loan maturity limit | 5 years before retirement |
Acceptable Payment Methods | Salary Deduction |
Interest rate | 16% |
Maximum term | 72 months |
Credit limit | $25,000 |
CRITERIA | ||
Minimum employment term | 6 months | |
Debt service ratio | 50% | |
Loan maturity limit | The earlier of the applicant turning 60 years old or 5 years before retirement | |
Interest rate | 12% | |
Maximum term | 120 months | |
EMPLOYMENT TENURE | CREDIT LIMIT | MAXIMUM TERM |
< 6 months | N/A | N/A |
6 - 12 months | $5,000 | 36 months |
13-36 months | $7,500 | 60 months |
37-60 months | $15,000 | 84 months |
60 months | $25,000 | 120 months |
4.5.1 Loan Officer Review: Loan Officers will conduct initial reviews, verify applications, and ensure all documentation is complete before submitting it for further processing.
4.5.2 Risk Manager Assessment: Risk Managers will conduct a thorough verification of applications, attach comprehensive credit reports, and provide a recommendation for approval or rejection based on detailed risk assessment.
4.5.3 Senior Management Referral: Applicants with questionable credit history or a credit grade lower than 'E' (as per internal grading system) will be automatically referred to Senior Management for a final review and decision.
4.5.4 Final Authority: Senior Management retains the final authority to approve or reject all loan applications, especially those escalated due to risk or exceeding standard thresholds.
Applicants will be formally informed of the loan decision in writing.
Approved Loans: The communication will include the full terms and conditions of the loan agreement.
Denied Loans: A clear and concise reason(s) for the rejection will be provided, adhering to fair lending practices.
Deferred Loans: A request for further details or clarification will be issued if the application needs to be reworked or additional information is required.
Accurate and comprehensive records of all loan applications, their evaluations, and final decisions must be maintained. All records must be securely stored digitally and comply fully with internal data protection regulations and external privacy laws.
Regular and mandatory training will be provided for all staff involved in the loan approval process. This training will cover best practices, updates on legal and regulatory requirements, and adherence to company policies. Continuous professional development and improvement in credit assessment skills are strongly encouraged.
The performance and outcomes of approved loans will be regularly monitored to identify trends, emerging risks, and areas for process improvement. Periodic reviews of the entire loan approval process will be conducted to ensure its continued effectiveness, efficiency, and compliance with all applicable regulations and internal policies.
This policy will be reviewed at least annually, or more frequently as needed, to ensure its continued relevance, effectiveness, and alignment with changes in regulatory requirements, market conditions, or internal business objectives. Any revisions will be communicated to all affected personnel.