When considering a loan application, which of the five Cs is vital even if not sufficient alone to secure a loan?
A) Capacity
B) Capital
C) Character
D) Collateral

Question

Quizplus · Accepted Answer

While all of the five Cs (Capacity, Capital, Character, Collateral, and Conditions) are important considerations when evaluating a loan application, Character is often seen as the most vital. This is because a person's character speaks to their level of trustworthiness, honesty, and reliability - all qualities that are essential for someone who is asking for money to repay it as promised. However, Character alone is not sufficient to secure a loan; lenders will also look at other factors such as a borrower's ability to repay the loan (Capacity), their existing assets and liabilities (Capital), the collateral they can offer to secure the loan (Collateral), and the overall economic and market conditions that could impact their ability to repay the loan (Conditions).

When Considering a Loan Application, Which of the Five Cs