Laenuvõimetu

Laenuvõimetu is an Estonian term that translates to "creditworthy" or "credit risk" in English, referring to an individual or entity's ability to repay a loan. Lenders assess creditworthiness to determine the likelihood of a borrower defaulting on their financial obligations. This assessment is crucial for financial institutions as it directly impacts their risk exposure.

Several factors contribute to an individual's or entity's creditworthiness. These include a consistent and sufficient income, a stable employment history, existing debt levels, and a history of responsible financial behavior, often reflected in a credit report. For businesses, factors such as profitability, cash flow, and industry stability are also considered.

When an individual or entity is deemed laenuvõimetu, it means they are considered a high risk for lenders. This could be due to insufficient income, a history of late payments or defaults, excessive existing debt, or a lack of collateral. As a result, lenders may refuse to grant a loan, offer a loan with much higher interest rates and stricter terms, or require a guarantor. Understanding and improving one's creditworthiness is essential for accessing financial products and services like loans, mortgages, and credit cards.