A lender that makes a loan to a minor would be violating which of the 6 Cs of lending?
A)Character
B)Capacity
C)Cash
D)Control
E)Collateral

Question

Quizplus · Accepted Answer

Capacity refers to a borrower's ability to repay a loan, including their income and assets. Since minors are not considered legally responsible for their finances, they do not have the capacity to enter into contracts like loans. Therefore, a lender who makes a loan to a minor would violate the capacity component of lending.

A Lender That Makes a Loan to a Minor Would