ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Character
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Capacity
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Collateral
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Capital
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Detailed explanation-1: -Capacity. This refers to your ability to repay the debt.
Detailed explanation-2: -Capital: A lender will want to know if you have valuable assets such as real estate, personal property, investments, or savings with which to repay debt if income is unavailable. Capacity: This refers to your ability to repay the debt.
Detailed explanation-3: -Character: refers to how a person has handled past debt obligations: From the credit history and personal background, honesty and reliability of the borrower to pay credit debts is determined. Capacity: refers to how much debt a borrower can comfortably handle.
Detailed explanation-4: -These 3 C’s of Credit are Character, Capital and Capacity based on which the lender decides on lending you. The score ranges from 300-900, and the ideal score to borrow an instant loan is 750.
Detailed explanation-5: -Capacity, one of the most important of all five factors, is how the borrower will pay back a loan. Capacity includes the ability to pay current financial commitments, repay any new debt, provide for replacement allowances, make payments for family living and maintain reserves for adversity.