Asked by Caitlyn Christy on Jun 06, 2024
Verified
Banks consider the borrower's ability and willingness to repay the loan when evaluating loan applications.
Borrower's Ability
The capacity of an individual or organization to repay borrowed funds.
Loan Applications
The process by which an individual, business, or organization requests to borrow money from a financial institution.
- Know the factors considered by banks in loan evaluations and the importance of deposit insurance.
Verified Answer
KO
Kiara OlavarriaJun 07, 2024
Final Answer :
True
Explanation :
Banks assess both the borrower's financial capacity (ability) to repay the loan, such as income and debt levels, and their credit history (willingness), which indicates how reliably they have repaid past debts.
Learning Objectives
- Know the factors considered by banks in loan evaluations and the importance of deposit insurance.