7 Personal Finance Terms You Should Know

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Five C’s of Credit
The Five C’s of Credit is an evaluation method lenders use to determine whether to extend you credit. They are as follows:

1. character: your reputation

2. capacity: your ability to repay the debt in a timely manner

3. capital: any financial resources you may have, such as income

4. collateral: any large assets (property for example) that you’re willing to put as a guarantee in case you default on the loan

5. conditions: the terms of the loan, such as interest rate

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