lending standards

Lending standards are the criteria financial institutions use to decide whether to lend money to someone. They consider factors like income, credit history, employment stability, and debt levels to assess the borrower’s ability to repay. High standards mean stricter requirements, making it harder to qualify, while lower standards are more lenient. These standards help lenders minimize risk and ensure borrowers can meet their repayment obligations. Essentially, lending standards are the rules that determine who qualifies for a loan and under what conditions.