responsible lending obligations

Responsible lending obligations require lenders to assess a borrower's ability to repay a loan before approval. This involves evaluating factors like income, expenses, and existing debts to ensure the loan is suitable and affordable for the borrower. The goal is to prevent over-indebtedness, protect consumers from financial hardship, and promote responsible borrowing. Lenders must also provide clear, transparent information about the terms and risks involved. Overall, these obligations help maintain a fair, stable financial system by ensuring loans are given based on careful assessment rather than on the lender’s profit motives alone.