Which of the following is also a factor in responsible lending?

Study for the Specialist Automotive Finance Test. Use flashcards and multiple-choice questions with detailed explanations to get exam ready!

Responsible lending focuses on whether a borrower can afford the loan now and in the future. The key idea is affordability—examining income, essential outgoings, and the proposed monthly payment to ensure the loan doesn’t push the borrower into financial hardship. Sustainability extends that by considering how the borrower’s finances could change over the term, such as changes in income, expenses, or interest rates, and whether repayments would still be manageable. In automotive finance, these concepts help prevent situations where a borrower struggles to keep up with payments down the line. The other options don’t address repayment capacity or long-term viability: fashion trends don’t affect ability to repay, employee benefits don’t determine ongoing affordability, and market risk relates to the lender’s exposure rather than the borrower’s ongoing repayment capacity. So affordability and sustainability are the factors that align with responsible lending.