letter individuals ability to handle their disposable earnings to cover a tax or loan. That is known as ability and it is a deciding consider loan decision. Furthermore called the five C's of credit and fixed cost protection proportion.
Borrower's ability to program a loan from his / her disposable earnings or cashflow, or even the taxpayer's ability to spend the tax. Called 'capacity' in banking, it is a vital aspect in getting that loan. See additionally five C's of credit and fixed fee coverage proportion.