Credit Management

Homework chapter#11

Antonio Olavarrieta

What is your feeling about Betty Cleene's character?  Please justify your answer.

Betty character towards obligation is good. She has paid car loan as agreed. She does have two claims which have been justified.

2.  What is your feeling about  her capacity?  Please justify your answer.

Monthly salary:2000+300(child support)=2300

Monthly Expenses: 450+249(furniture)+60(charge account)+148(Oldsmobile)=907+ 213.00(new payment)=1120.00

Even though income is not high but it is sufficient to cover the new loan.

3.  What is your feeling about her capital?  Please justify your answer.

She doesn’t have a lot of savings but the risk of losing her job is low since she is a self-employed and her company time slots are filled; that’s why her capital is fine

4.  What is your feeling about her collateral?  Please justify your answer.

Bank can have the car back if she doesn’t pay as agreed , In addition to that her credit will be affected

5.  What is your feeling about her conditions?  Please justify your answer.

Her condition is good since she has proved by supplying taxes that her salary is unchanging stable and the job slot are filled so that shows it is a very demanded work

6.  Using your common sense and your answers to questions 1-5, what do you think about lending money to Betty Cleene?  Please justify your answer.

The card is a need for her since the other car died. She does have a good credit history in the bank and sufficient income to pay the loan. That’s why we should approve the loan

7.  What would you say to Mrs. Cleene when responding to her loan request?  Remember not to violate any credit laws regarding  illegal discrimination.

Mrs Cleene ,your loan has been approved since you have sufficient income and a good credit history in the bank . However if for any reason you are not able to make payment as agreed we will have the ownership of the car