3.7 Borrowing Capacity

This topic describes the information about the total amount the applicant is eligible to borrow.

Maximum loan amount are used for loans, credit cards, and line of credit accounts. The maximum credit amount depends on a number of factors including the borrower’s credit worthiness, that is, financial profile and debt to income, loan term, loan purpose, whether the loan is supported by a collateral etc.

Using this screen, the user can link a rule for calculating borrowing capacity. The user can calculate the maximum lendable amount based on the various criteria of the lender such as debt to income ratio, credit score, credit history, etc.

A sample rule to calculate borrowing capacity is given below:

Scenario: Based on Income and FICO score

Rule 1:

IF MIN(FICO_SCORE) >= 500 AND MIN(EMPLOYMENT_PERIOD )< 1 YEAR

THEN MULTIPLIER = 5

ELSEIF MIN(FICO_SCORE) < 500 AND MIN(EMPLOYMENT_PERIOD) > 1 YEAR

THEN MULTIPLIER = 4

Rule2: Max Lendable Amount

MIN(Income) * Rule1

This topic contains the following subtopics:

• Create Borrowing Capacity
  This topic describes the systematic instructions to define the borrowing capacity based on the various input.
• View Borrowing Capacity
  This topic describes the systematic instructions to view the borrowing capacity.