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$4.00
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1 mg
Description
The 5 Cs of Credit are a framework used by lenders to evaluate the creditworthiness of borrowers. These criteria help determine the risk associated with lending money and the terms of the loan. The 5 Cs are Character, Capacity, Capital, Collateral, and Conditions. Character refers to the borrower's reputation and track record for repaying debts. Capacity measures the borrower's ability to repay the loan based on income and other financial obligations. Capital represents the money or assets the borrower is willing to commit to the venture. Collateral includes assets the borrower pledges as security for the loan. Conditions encompass external factors and the specifics of the loan itself. Lenders look at how broader economic conditions, industry trends, and the purpose of the loan might affect the borrower's ability to repay.
