nCino Certified Commercial Banking Functional — Question 15

Which of the following ratios is a way lenders can measure an individual's ability to manage monthly payments and repay debts?

Answer options

• A. Debt to Income
• B. Collateral to Debt
• C. Debt to Loan Value
• D. Loan to Value

Correct answer: B

Explanation

The correct answer is B, Collateral to Debt, as it evaluates the assets pledged against the debt, giving lenders insight into repayment security. The other options, while related to financial assessments, do not specifically measure an individual's ability to manage monthly payments.