Laenukatse

Laenukatse is a term of Estonian origin that translates to "loan test" or "loan inspection". It refers to the process of assessing the creditworthiness of a potential borrower. This typically involves a thorough examination of an individual's or entity's financial history, income stability, existing debts, and overall ability to repay a loan. Lenders employ laenukatse to mitigate the risk of default and ensure that loans are issued responsibly.

The laenukatse process can involve several components. It may include a review of credit reports, which detail past borrowing and repayment behavior. Lenders will also scrutinize income statements, employment records, and other financial documents to verify the borrower's ability to meet repayment obligations. In some cases, collateral may also be considered as part of the assessment. The outcome of the laenukatse determines whether a loan application is approved, denied, or approved with specific terms and conditions, such as a higher interest rate or a shorter repayment period. This due diligence is a fundamental aspect of responsible lending practices worldwide.