When your parents determine that they need a loan to make a purchase, they will need to go to the bank and speak with a loan officer. In community banks, like Texas Bank and Trust, the loan officer helps your parents decide what type of loan they would need.
Since banks need to make sure the person borrowing the money can afford to pay it back, the loan officer will have your parents fill out a loan application. This application asks for information such as your parents’ employment history, annual income, and previous loans they have received. Once all the paperwork is done, the loan officer will decide whether to approve or deny the loan. If approved, your parents will be given the money and can make the needed purchase.
As a kid, instead of going to the bank, you may be able to get a loan from your parents to buy something you need, like a lawnmower. Remember, a loan must be paid back, so make a plan on how you will pay your parents back.