Applying for a loan can be nerve-racking and challenging if you do not understand how credit works and what bankers use to determine if you are a good credit risk or not.
In this post, I will share with you the 4 C's that bankers look at before making decisions on whether to lend you money or not.
The 4 C's are Character, Collateral, Capacity, and Credit.
Let's address each.
In this post, I will share with you the 4 C's that bankers look at before making decisions on whether to lend you money or not.
The 4 C's are Character, Collateral, Capacity, and Credit.
Let's address each.
Character
Lenders look for signs of stability and reliability, such as your employment history and proof of regular mortgage or rent payments.
Collateral
A lender may require that the loan be backed by the value of your property, such as a house or vehicle.
Capacity
As a borrower, you will be required to prove that you have the means to repay the loan. Having a steady job that provides dependable income is highly important.
Credit
Your credit and payment history will be reviewed by the lender.
So there you have it, these are the 4 areas every reputable lender will consider before extending you credit.
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