Final answer:
Credit rationing is the inability to get a loan even though a person would likely be able to repay it. Factors such as late loan payments and rising interest rates can contribute to credit rationing.
Step-by-step explanation:
The inability to get a loan even though a person likely would be able to repay the loan plus interest is known as credit rationing. Credit rationing occurs when lenders restrict the amount and availability of loans to borrowers, often due to concerns about their creditworthiness.
There are several factors that can contribute to credit rationing, such as a borrower's history of late loan payments and the prevailing interest rates in the economy. If a borrower has been late on a number of loan payments, lenders may view them as less likely to repay the loan on time and may offer less favorable loan terms or deny the loan altogether.
Similarly, if interest rates have risen, a loan made at a time of relatively lower interest rates may look less attractive to lenders, leading to credit rationing.