Credit assessment is the process by which a lender evaluates the technical feasibility, economic viability and banking capacity, including the creditworthiness of the prospective borrower. A client's credit assessment process is in the evaluation if that client is responsible for repaying the loan amount within the stipulated time, or not. Here the bank has its own methodology to determine whether a borrower is solvent or not. It is determined in terms of standards and standards set by banks. Being a very crucial step in sanctioning a loan, the borrower must be very careful in planning their ways of financing. However, the borrower alone does not have to do all the hard work. Banks should be cautious lest they end up increasing their exposure to risk. All banks use their own objective, subjective, financial and non-financial techniques to evaluate the solvency of their clients. Components of the credit assessment process When evaluating a client, the bank needs to know the following information: Applicant and co-applicant income, family history, employer / company, tenure security, tax background, applicant assets and employer recurring liabilities, other current and future liabilities and investments (if any). Of these, applicants' incomes are the most important criteria for understanding and calculating the solvency of applicants. As discussed above, the actual rules decided by the banks differ considerably. Each one has certain rules within which the client needs to fit in order to be eligible for a loan. Based on these parameters, the maximum loan amount that the bank can sanction is calculated and the customer is eligible. The broad tools for determining eligibility remain the same for all banks.