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Loan FAQ

“I got online and found some quick answers to my questions that helped me get off to the right start.”

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What information do I need to apply for a loan with Legacy Bank?

  • For a personal loan, you may need to submit your two most recent years of IRS tax returns and a Personal Financial Statement. For a business loan, you'll need to submit the above, as well as the most recent three years' business tax returns, and a year-to-date balance sheet and income statement. 

Will you run my credit report as part of the approval process?

  • Yes, we will obtain a credit report for all of the individuals applying for the loan. 

What does “underwriting” mean?

  • Underwriting involves all of the financial analysis that goes into the approval decision. Activities involved in the process include—but are not limited to—debt and income analysis, credit report examination, tax return scrutiny, and loan-to-value calculation. All of this work is done in-house by the loan officer with whom you work from the very beginning. 

How long does it take to get a loan with Legacy Bank?

  • There is no standard timeframe for obtaining a loan at Legacy Bank. The approval decision most usually comes within five business days from the receipt of your complete application. The loan closing can range from two or three business days to four or six weeks. Both the decision and closing depend on the nature of the loan. Our goal is to make the process as fast and easy on you as possible. 

Where are Legacy Bank's loan approval decisions made?

  • All loan approval decisions are made within the bank. 

What is a “credit score?”

  • This is a number which represents your creditworthiness, which in turn means the likelihood that you'll repay your debts. This is most often represented by FICO, which is a blending of your results from three national credit bureaus:  Experian, Equifax, and TransUnion. The number is comprised of:
  • Payment history (35%)
  • Debt burden (30%)
  • Credit history (15%)
  • Credit type (10%)
  • Recent searches (10%)

What are the five “C’s” of credit?

  • These are:
  • Character:    This is your reputation as it pertains to banking.
  • Capacity:      This is your ability to repay the loan, based on your income against recurring debts. 
  • Capital:         This is what you put towards the loan (e.g., down payment).
  • Collateral:    This is what secures the loan. 
  • Conditions:  This factors in the loan's terms (e.g., interest rate and amortization).

What is loan-to-value?

  • Loan-to-value (LTV) is the amount of the loan divided by the value of that which secures the loan. This produces a ratio—expressed as a percentage—that informs the bank of the risk involved with the loan. If the loan is $10,000 and the value of the collateral is $15,000, the LTV ratio is 66.7%. The lower the ratio, the less risk there is to the bank. 

What does” amortization” mean?

  • At its root, a loan's amortization is the amount of time it will take to pay off the loan in full, assuming a fixed repayment schedule with regular installments.