A loan officer is examining your income and the amount of your existing debt payments and monthly expenses in deciding whether to make a loan to you today.Which aspect of the 5 Cs of lending is the loan officer most likely looking at?
A)Character
B)Capacity
C)Capital
D)Collateral
E)Conditions

Question

Quizplus · Accepted Answer

Capacity refers to a borrower's ability to repay a loan, taking into account their income and existing debt obligations. The loan officer is assessing the borrower's capacity by examining their income and monthly expenses.

A Loan Officer Is Examining Your Income and the Amount