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what is the most important principle of lending?

what is the most important principle of lending?

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The most important principle of lending is that the lender must look into the creditworthiness of the borrower. Hence the lending principle is that the borrower must be capable of returning the principal amount lent to him. For this the lender must look into his creditworthiness and his existing amount of debt. The interest rate will be set according to the risk incurred by the lender. Higher the creditworthiness of the borrower lower will be the rate and vice versa.

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