Will the client be willing to repay the loan? Does the client have a sense of responsibility for his/her obligations?How has this sense of responsibility been demonstrated?

Will the client be able to repay the loan? What are the financial circumstances of the client? Has the client thought about or reviewed their budget to determine his/her ability to repay the loan? Are sources other than employment income depended upon to make these payments and are these sources stable?

Collateral may make the loan safe, but not necessarily sound. Provides incentive for client to repay the loan. Provides a means of at least partial recovery if a loan defaults. Collateral should not be considered as a source of repayment.

Provides a cushion for repayment in the event of the client having a financial setback. Indicates an ability and willingness of the client to save and accumulate assets. Confirms that the borrower manages his/her financial affairs adequately and within his/her income. Lack of accumulated worth could be a danger signal unless the applicant is fairly young.

Represents accumulated experience of the client's habits in performing credit obligations. Provides a record of past credit experience. If there is a problem, a full and satisfactory explanation should be received.