The reason why character is an important consideration in a loan request is that...
A)a good borrower always chooses a higher interest rate to distinguish itself from a bad one
B)a good borrower always chooses a lower interest rate to distinguish itself from a bad one
C)a borrower's credit reputation is a good indication of its incentive to default
D)a good borrower has more collateral to pledge
E)all of the above

Question

Quizplus · Accepted Answer

A borrower's character or credit reputation is a good indication of their willingness and ability to repay the loan. This helps lenders assess the risk associated with granting the loan and the likelihood of default. The other options given are not relevant or accurate.

The Reason Why Character Is an Important Consideration in a Loan