When evaluating credit,a customer who has sufficient disposable income and cash flow to pay off a loan is said to have
A)creditworthiness.
B)capacity.
C)character.
D)collateral.

Question

Quizplus · Accepted Answer

Capacity refers to the ability of a borrower to pay back a loan or credit. This includes factors such as income, cash flow, and debt-to-income ratio. Therefore, a customer with sufficient disposable income and cash flow to pay off a loan is said to have capacity. Creditworthiness refers to a borrower's overall credit history, while character refers to their reputation and trustworthiness. Collateral refers to property or assets that can be pledged as security for a loan.

When Evaluating Credit,a Customer Who Has Sufficient Disposable Income and Cash