Week 3 Assignment 1 FP101 - Collateral This makes you a better credit risk to the lender Collateral Lenders will evaluate your debt-payment ratio

Axia College Material Appendix C The Five C’s Worksheet Directions: Identify the following factor descriptions to their corresponding C of credit. The five C’s are listed below: • Capacity • Capital • Collateral • Character • Conditions Condition Which C? Your household cash flow helps to determine this C: Capacity Under these __________, you may still be approved with a cosigner Conditions This demonstrates how much your assets are worth. Capital Using your car or house as a promise to pay

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Unformatted text preview: Collateral This makes you a better credit risk to the lender Collateral Lenders will evaluate your debt-payment ratio. Capacity The lender is taking your unique situation under consideration. Conditions Previous credit history Character This shows how long you have worked for your employer and if you have obtained an education. Character Having more at stake may make you less likely to default on a loan. Capital FP/101...
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