The Screening Process a Bank Follows for a Loan Applicant

question 68

Multiple Choice

The screening process a bank follows for a loan applicant:

• A)Uses information that anyone can obtain, the bank can usually obtain it cheaper
• B)Includes information that can be available to other firms, as well as proprietary information that only the bank would have
• C)Is based on just public information
• D)Uses only confidential information

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Definitions:

Repayment Period

The time frame agreed upon within a loan agreement for the borrower to pay back the borrowed amount plus any applicable interest.

Promissory Note

Commercial paper or instrument in which the maker promises to pay a specific sum of money to another person, to his order, or to bearer.

Cosign

To sign jointly with another or others, especially in agreeing to be responsible for a loan if the primary borrower defaults.

Minor

A person who is under the legal age of majority, and therefore has limited legal rights and responsibilities.