The Five C’s Worksheet

The Five Cs Worksheet Directions Identify the following factor descriptions to their corresponding C of citation. The tail fin Cs are listed below Capacity means the ability or intent to reinforce your debts, basing it upon your household cash eat lenders typic tout ensembley follow different methods to consider my expenses relative to the persons income. crown is the households net worth, by combining all assets, and making sure that the debts is littler than the total assets, the lender can verify that the impart exit be paid by liquidating all assets should you need to pay your debts, sort of risking all you got in order to get their trust. Collateral can be either your car, home, boat, anything that you can pledge to ingest the loan safer, and the lender feel that you are not creation a high-risk loan, because you can lose your own assets.Character is the history behind your credit entry, employment, and education, as healthful as how well you handle your obligations, s uch as accrued debts in the past that were taken trade of. They measure your trustworthiness. Conditions are the considerations a lender makes after viewing the broad spectrum of your situation, being that every loan is unique in its situations, the lender can take into considerations your economic status, the employment opportunities in your area, or anything that will make you either less of a risk or more. ConditionWhich C? Your household cash flow helps to determine this CCapacity Under these __________, you may still be approved with a cosignerConditions This demonstrates how oftentimes your assets are worth. CapitalUsing your car or house as a promise to payCollateral This makes you a better credit risk to the lender this could be any of the Cs. For example, assets that are offered as security against default. Collateral and Capital Lenders will evaluate your debt-payment ratio. Capacity The lender is taking your unique situation under consideration. Conditions Previous cre dit history 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