Which is a factor considered in responsible lending?

• A. Borrower’s hair color
• B. Creditworthiness
• C. Brand of car manufacturer
• D. Geographic location

Answer: (B)

In responsible lending, the key idea is assessing whether the borrower can actually afford and realistically repay the loan. The best answer is creditworthiness, which reflects the borrower's ability and willingness to repay based on their financial profile. This includes verified income and employment stability, existing debts and financial obligations, monthly living expenses, and their credit history and past repayment behavior. By evaluating creditworthiness, lenders perform affordability checks and tailor loan terms to match repayment capacity, protecting both the borrower and the lender from unaffordable debt.

Hair color has no bearing on repayment risk. The brand of a car manufacturer is not related to financial behavior or repayment ability. Geographic location can sometimes be a contextual risk factor, but it does not directly measure a borrower’s repayment capacity in the standard responsible-lending framework. So the factor that aligns with responsible lending is creditworthiness.