They’re what lenders use to decide whether to give you a loan...or not.
Conditions - What’s the purpose of the loan, and how much do you need? Are you buying a house, a car, launching a business, or something else entirely different?
Collateral - What can you pledge for security? For a mortgage, it’s your home. For a car loan, it’s the car. If you don’t repay, the lender can take that asset.
Capital - This is your financial reputation. Do you pay your bills on time? What’s your credit score? Have you managed past loans responsibly?
Capacity - That is your ability to repay based on your income compared to your debt. Lenders want to know – can you reliably make payments - month after month, year after year?
Character - Some lenders say that this is the most important factor. Even if you meet all of the other criteria, your loan could still be denied if the lender feels that your character does not align with theirs. It might be based on your credit history or simply the gut feeling that they get by working with you. Are you trustworthy? Are you a good fit as a customer?
Character always matters, and these 5 C’s are not just “banking buzzwords”.
They’re the keys to getting approved.
