"Collateral" in the 5 C’s of credit refers to:
-
The amount of loan applied for
-
The applicant’s salary details
-
The repayment schedule of the loan
-
An asset pledged as security for the loan
What does "Character" represent in the 5 C’s of credit?
-
The interest rate charged on the loan
-
The borrower’s personal hobbies
-
The borrower's honesty, reliability,and credit history
-
The type of loan applied for
Which factor affects the loan sanction process the most?
-
The borrower’s fashion sense
-
The borrower’s favorite movie
-
The borrower's holiday plans
-
Credit Score and Repayment History
What does the bank check in the borrower's financial history during loan sanctioning?
-
Number of social media friends
-
Monthly salary, liabilities, and existing loans
-
Favorite vacation destination
-
Shopping habits
What is the final step in the loan sanction process before disbursement?
-
Cancelling the loan application
-
Changing the loan amount randomly
-
Asking for additional interest payments
-
Signing the loan agreement and submitting required documents
What happens if a borrower does not meet the bank’s criteria for loan sanction?
-
Discount on loan
-
Ignores criteria and proceeds
-
The loan is rejected or delayed
-
Loan Auto-approved
What does "Loan Disbursement" refer to?
-
The release of the loan proceeds to the borrower
-
The refusal of a loan application
-
The approval process of a loan
-
Payment of the loan by the borrower
What could delay the loan disbursement process?
-
Fast approval from the lender
-
A high credit score
-
Borrower repaying another loan
-
Incomplete documentation
Why is it important to identify beneficial owners in banking?
-
To prevent money laundering and fraud
-
To promote anonymous transactions
-
To speed up illegal fund transfers
-
To increase bank fees
