A bank is considering making a loan to Neville Langdon.Neville has bounced three checks in the last year and already has $10,000 on a credit card and an automobile loan with a large balance due.What aspect of evaluating a consumer loan application is this fact concerned with?

Question

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This fact is concerned with the pyramiding of debt, which refers to a situation where a borrower takes on more debt than they can handle, leading to a cycle of borrowing to pay off previous debts. This can be a red flag for lenders as it increases the risk of default on the loan.

A Bank Is Considering Making a Loan to Neville Langdon