Ability to pay refers to the capacity of a debtor/debtor to pay or repay its debts, loans or similar obligations. The ability to pay can be calculated using a simple formula. The greater the amount of money available after fixed expenses, the greater the debtor's capacity to pay off their debt.
Capacity. Capacity refers to the borrower's ability to pay back a loan. This is one of a creditor's most important considerations when lending money.
Some common synonyms of repay are compensate, indemnify, pay, recompense, reimburse, remunerate, and satisfy.
If you can't pay your debts, you may be considering bankruptcy, or an alternative to bankruptcy called a 'debt agreement'. These are formal legal options available under the Bankruptcy Act 1966. While these formal options may free you from debt, they will have serious long-term consequences.
Insolvency is a state of financial distress in which a person or business is unable to pay their debts. Insolvency is when liabilities are greater than the value of the company, or when a debtor cannot pay the debts they owe. A company can become insolvent due to a number of situations that lead to poor cash flow.
What are the Basic Ability-to-Repay Requirements? The ATR/QM rule requires you to make a reasonable, good-faith determination that a member has the ability to repay a covered mortgage loan before or when you consummate the loan.
synonyms: compensate, make up, pay. settle. dispose of; make a financial settlement. verb.
Therefore the correct answer is option 'D'. Insolvent is a person who has no money to pay off his debts.
reciprocate. take retribution. return like for like. repay in the same coin.
The factors determining the borrower's ability to repay include the borrower's current income and assets. They may also include reasonably expected income. The borrower must also provide verification of this income and their employment status.
A firm's ability to meet its long-term financial obligations is called solvency. Analysts, investors, and prospective lenders use solvency ratios to evaluate a firm's long-term financial health and creditworthiness. A solvent business owns more than it owes in the long term and has a manageable debt load.
Amortization: Loan payments by equal periodic amounts calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.
The Ability-to-Repay/Qualified Mortgage Rule (ATR/QM Rule) requires a creditor to make a reasonable, good faith determination of a consumer's ability to repay a residential mortgage loan according to its terms.
The one who is unable to pay one's debt is bankrupt or insolvent. (
Liquidity refers to the ability to cover short-term obligations. Solvency, on the other hand, is a firm's ability to pay long-term obligations. For a firm, this will often include being able to repay interest and principal on debts (such as bonds) or long-term leases.
In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be insolvent. There are two forms: cash-flow insolvency and balance-sheet insolvency.
Insolvent- unable to pay debts owed. Corrupt- having or showing a willingness to act dishonestly in return for money or personal gain.
Step-by-step explanation:
A person's ability to pay off debts based on the money that person has available to meet financial obligation is called "Financial capacity". As Financial capacity of a person make him able to pay off debts.
Repayment refers to paying back money that you have borrowed. Loan repayments cover a part of the principal, or the amount borrowed, and interest, which is what the lender charges for supplying the funds. Loan agreements specify the repayment terms, including the interest rates to be paid.
Credit: A 6-Letter Word for Debt.
In banking, ability to pay is called “capacity.” It is used by lending institutions to determine a borrower's ability to make his interest and principal repayments on a loan, using his or her disposable income or cash flow.
Capacity refers to your ability to repay loans. Lenders can check your capacity by looking at how much debt you have and comparing it to how much income you earn. This is known as your debt-to-income (DTI) ratio.
Capacity
Capacity measures the borrower's ability to repay a loan by comparing income against recurring debts and assessing the borrower's debt-to-income (DTI) ratio. Lenders calculate DTI by adding a borrower's total monthly debt payments and dividing that by the borrower's gross monthly income.