How do you check the repayment capacity of an applicant?

Question

Accepted Answer

To check the repayment capacity of an applicant, I assess their income, credit history, and financial obligations.

Evaluate the applicant's income and employment stability
Review their credit history and credit score
Assess their existing financial obligations such as loans, mortgages, and credit card debt
Consider their debt-to-income ratio
Analyze their repayment track record on previous loans or credit facilities
Verify their assets and collateral, if applicable

Accepted Answer

Verify their income sources and stability.

Calculate their debt-to-income ratio (DTI).

Review their credit history, score, and payment behavior.

Consider their regular expenses and financial obligations.

Evaluate their financial reserves or savings.

Inquire about other outstanding loans or credit commitments.

Assess the stability of their employment or business.

Verify their payment history through references or previous creditors.

Accepted Answer

There are numbers of factors to decipher regarding repayment capacity:

1. Cash flow, 2. Past repayment tracks, 3. Present EBIDTA, 4. Surplus cash flows after serving current obligations, 5. Banking conduct/ Avg Monthly Bls, 6. Group firms review if any. 7 Any other source of income. Being in credit, one should ensure to lend strongly leveraged customer.

Accepted Answer

There are numbers of factor to decipher regarding repayment capacity:

1. Cash flow, 2. Past repayment tracks, 3. Present EBIDTA, 4. Surplus cash flows after serving current obligations, 5. Banking conduct/ Avg Monthly Bls, 6. Group firms review if any. 7 Any other source of income. Being in credit, one should ensure to lend strongly leveraged customer.

Asked in CreditAccess Grameen

How do you check the repayment capacity of an applicant?

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