Knowing the 5C Principle In Loan Submission

So far many people know about loan analysis is limited to checking loan checking. Please note that Checking is only one of the analytical sections based on Principle 5C: character (debtor candidate character), capacity (debtor candidate’s ability to return), capital (collateral financial condition), collateral (collateral), and condition (economic condition). To find out more, you can know through the explanation below. To get an easy loan, you can visit now.

1. Character

This principle is seen in terms of personality of the debtor candidate. This can be seen from the results of interviews between customer service to prospective borrowers who want to apply for loan, regarding the background, life habits, lifestyle prospective borrowers, and others. The essence of this character principle is to assess whether the prospective borrower can be trusted in working with the bank.

2. Capacity

This principle assesses prospective borrowers for their ability to run finances, both as employees and employers. Whether the prospective debtor has experienced financial problems before or not. That way, the bank can know the ability of prospective borrowers in paying loan. To measure capacity, calculate and compare monthly income and expenses. Remember, if you want the loan application approved, keep the whole instalment of the borrowed loan does not spend 30% of income each month.

3. Capital

This is related to the condition of assets and wealth owned, especially those owned by prospective borrowers who are entrepreneurs. Capital is assessed from the debtor’s annual report. From the assessment, the bank can determine whether or not the prospective borrower gets a loan. Or how much loan will be given?

4. Collateral

This principle should be considered by prospective borrowers if they can not fulfil their obligations in paying loan instalments. If this bad thing ultimately happens, in accordance with the existing provisions, the bank will confiscate the assets that have been pledged as collateral. This collateral may be land, buildings, motor vehicles, gold, or deposits. In principle, the value of the asset must be higher than the nominal value of the loan. In the event of a bad loan, the collateral will be auctioned off by the bank to pay the remainder of your loan. Banks generally have a maximum loan standard requirement of 80% of the value of the collateral.

5. Condition

This principle is influenced by factors outside banks or prospective borrowers. That is, the economic conditions of an area or country are very influential. Therefore, this principle is referred to as the principle of prudence in analysing the potential risk of disruption of prospective borrowers’ income due to economic conditions.