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