Which of the Five C's relates to a borrower's financial resources or net worth?

• A. Character
• B. Capacity
• C. Collateral
• D. Capital

Answer: (D)

Capital is the part of the Five C's that covers a borrower's financial resources and net worth. It looks at the assets a borrower has—savings, investments, real estate, and other resources—minus any liabilities, showing how much wealth they bring to the table beyond the loan itself. This signals to lenders the cushion available if income dips and helps determine loan size and terms. The other Cs focus on different factors: Character is about trustworthiness and credit history; Capacity concerns the borrower's ability to repay from income; Collateral is an asset pledged to secure the loan; Conditions relate to the loan's purpose and the broader economic environment. Since the question is about financial resources or net worth, capital is the best fit.