lending practices

Lending practices involve how financial institutions provide money to individuals or businesses with the expectation of repayment over time, often with interest. Lenders assess borrowers' creditworthiness by reviewing financial history, income, and debt levels to decide if they qualify and under what terms. The process includes setting interest rates, repayment schedules, and conditions to ensure the lender earns a return and minimizes risk. Good lending practices promote responsible borrowing, protect the stability of financial institutions, and support economic growth by enabling access to necessary funds while managing potential losses.