Podcast
Questions and Answers
What is the primary concern with using an old car, a painting, or a disused building as collateral for a loan?
What is the primary concern with using an old car, a painting, or a disused building as collateral for a loan?
- The asset may appreciate in value over time
- The asset may lose its sentimental value
- The asset may not provide sufficient pressure on the borrower (correct)
- The asset may be difficult to liquidate
What is a key factor in assessing the value of collateral?
What is a key factor in assessing the value of collateral?
- The borrower's credit history
- The potential marketability of the collateral in the near future (correct)
- The lender's reputation
- The borrower's income
What is an example of a deterioration of collateral?
What is an example of a deterioration of collateral?
- A piece of property declared unfit for occupation (correct)
- A guarantor gaining income generating capacity
- A piece of property increasing in value
- A lender's reputation improving
Why is it essential for a lending bank to monitor collateral value?
Why is it essential for a lending bank to monitor collateral value?
What is a characteristic of a strategic block of shares with voting rights in a family company as collateral?
What is a characteristic of a strategic block of shares with voting rights in a family company as collateral?
What is the purpose of assessing the transferability of ownership of collateral?
What is the purpose of assessing the transferability of ownership of collateral?
What is the primary purpose of collateral in lending?
What is the primary purpose of collateral in lending?
Why do lenders prefer to structure loans that do not require collateral?
Why do lenders prefer to structure loans that do not require collateral?
What is the 'first way out' for a lender?
What is the 'first way out' for a lender?
What is the characteristic of an ideal collateral?
What is the characteristic of an ideal collateral?
Why do lenders seek additional support in the form of collateral?
Why do lenders seek additional support in the form of collateral?
What happens to a good loan with adequate security if the borrower's circumstances change in the future?
What happens to a good loan with adequate security if the borrower's circumstances change in the future?
What is the primary expectation of the bank from borrowers in terms of character?
What is the primary expectation of the bank from borrowers in terms of character?
What is the consequence of a borrower's record of poor behaviour and/or lack of responsibility?
What is the consequence of a borrower's record of poor behaviour and/or lack of responsibility?
Which of the following attributes is considered equally important as traditional values in assessing the character of the individual borrower?
Which of the following attributes is considered equally important as traditional values in assessing the character of the individual borrower?
What is the primary aspect of a borrower's character that is assessed in consumer lending?
What is the primary aspect of a borrower's character that is assessed in consumer lending?
What is the relationship between the character of a company and its senior management?
What is the relationship between the character of a company and its senior management?
How does the bank apply the concept of character in credit assessment?
How does the bank apply the concept of character in credit assessment?
