Question

What are the three c's that a lending institution look for?

Answer 1

Character:
refers to how a person has handled past debt obligations: From the credit history and personal background, honesty and reliability of the borrower to pay credit debts is determined.

Capacity:
refers to how much debt a borrower can comfortably handle. Income streams are analyzed and any legal obligations looked into, which could interfere in repayment.

Capital:
refers to current available assets of the borrower, such as real estate, savings or investment that could be used to repay debt if income should be unavailable.

CAMEL is a tool sometimes used for assessing credit-worthiness of a borrower.

CAMEL refers to:

C: Capital A: Assets M: Management E: Equity L: Liquidity

Answer 2

The three C's that lending institutions look for are

Character

Capital

Capacity

Step-by-step explanation:

Character is the personal element of the three it relays on your credit history, your reliability to pay, your job, your time in that job, etc.

Capital is the "collateral" assets in the form of cash, investments, or real state you have to cover your debt in case you don't have the liquidity to pay the debt.

Capacity is the payment potential you have to pay that debt, in other words, is your job provides you a salary to cover your expenses and pay your debt.