Chapter 10, Problem 21AA

To determine

To state: Credit check before grant of loans.

Answer to Problem 21AA

There are many factors that need to checked before granting loans namely credit history of the borrower, occupation, age, etc.

Explanation of Solution

There are many qualities that are to be checked before granting a loan-

Credit history, i.e., loans should be provided after checking the credit history of the borrower which means good financial habits.

Occupation is also a factor which determines whether the borrower earnings are stable and whether he will be able to pay off the debts or not.

Age is also a factor as it is preferable to lend loans to age groups 30-50 as they are more financially stable in life and will be able to pay off the loan.

Economics Concept Introduction

Introduction:Before granting loans, it is required by the lenders to check the ability of the borrowers to pay off the debts.