Liability is an obligation which can be a Loan or revenues of a company that deferred or expenses of a company that accrued. It is the responsibility of the borrower to repay something that is not owned by him like if a person has a car loan or a house loan then it is liability of that person and he should pay the EMI just to repay the loan amount.
Liability Form is one of the main forms that are required for getting the loan approved. The document basically contains all the liabilities that a person is holding that include any debts, loans, any unpaid credit card bills etc. All the information on this form is very helpful for the lender as he can find out if the borrower can repay the loan or not. Total income and total liability on a person can help in calculating the financial status of the borrower.
Loan is a process of lending huge amount of money to someone unknown and thus the risk factor is a very high. Liability Form is thus going to help the lender to have all the financial information about the borrower which can help in developing a strong trust level between the two. When the lender is going to have all the information about the borrower like Name, Address, Total income, Total liabilities then it is easy to calculate that the money is going in right hands and possibility to get back the money is more.