Loan approval refers to the process by which a lender evaluates an individual's or business's creditworthiness and decides whether or not to provide them with a loan. During this process, the borrower typically submits financial documents such as their income statement, tax returns, and bank statements for review. The lender will also consider factors like the borrower’s credit score, debt-to-income ratio, and employment history to determine if they are a good risk for repaying the loan on time. If the lender is satisfied with the information provided and believes that the borrower can repay the loan, then the application will be approved, meaning the borrower may proceed with taking out the loan according to the agreed terms and conditions.