Learn something new every day More Info... by email
Personal financial statements are documents that outline the current financial status of an individual. The detail included in statements of this type will normally include information such as the personal assets of the individual, along with data on personal liabilities, sources of income, and any other information that is relevant to the individual’s finances. Documentation of this type is often required when a consumer applies for some type of personal loan, a mortgage, or some other kind of aid.
The structure of personal financial statements will normally call for including several different forms in the overall statement package. A balance sheet will often serve as the cover sheet for the statement, providing a quick overview of the individual’s assets and liabilities. Information to support the line items on the balance sheet are normally attached, and will often include income statements, bank and credit card statements, and other supporting detail. Other forms may be included in the statement to account for various assets in the possession of the consumer, including real estate, art collections, and other assets that are considered marketable and of value.
There are several situations in which consumers may be called upon to prepare and render personal financial statements. It is not unusual for lenders to require a range of financial documents that provide specific information relevant to the consideration of a loan. Just how much detail must be included will often depend on the guidelines provided by the individual lender, as well as governmental laws that have to do with the disclosure of personal financial information. The amount of the loan may also have some impact on the amount of information included in personal financial statements, since lenders naturally assume greater risk when extending loans for larger amounts and longer terms.
Organizations that provide financial aid will also often require personal financial statements as part of the process for qualifying applicants. For example, an organization that offers financial aid for continuing education endeavors will look closely at the resources of the student, determine if the financial situation of the applicant suggests that the aid is needed, and then determine how much aid the student will receive. When applying for any type of financial assistance, from loans to financial aid, it is important to follow the guidelines provided, taking care to arrange the data in whatever format is required by the lender or grantor. Doing so will increase the chances of receiving full consideration and possibly result in obtaining the loan or aid desired.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!