Veronica takes home $1100 per month at her current job. She seeks a loan from her local bank for $40,000 to purchase a new car.
Her estimated monthly payment will be $900 per month. Why will the bank probably deny her request, even if she has a perfect history of repaying past loans? a.Banks never make loans to people who make under $30,000 per year. b.Banks rarely make loans to people who wish to buy a new car. c.Her income will probably not allow her to make the loan payments. d.She probably has a very low credit score based on her history.
The correct answer is c) Your income probably cannot make loan payments.
Explanation:
Even if the bank sees that Verónica has a perfect track record in past loans, it is possible that she will be denied the loan, since Verónica's monthly income will not be enough to pay the loan.
Since she should pay 900 dollars a month, and her salary is 1100 dollars, this would leave Veronica with $ 200 remaining that would be insufficient to pay her monthly expenses. So the bank when making the calculations of the monthly expenses of the person considers that he does not have the income that allows him to pay the loan on a monthly basis.
