Qualification

Definition

The process of determining whether a prospective borrower has the ability, meaning sufficient assets and income, to repay a loan.

Qualification is sometimes referred to as "pre-qualification" because it is subject to verification of the information provided by the applicant.

Qualification is short of approval because it does not take account of the credit history of the borrower.

Qualified borrowers may ultimately be turned down because, while they have demonstrated the capacity to repay, a poor credit history suggests that they may be unwilling to pay.

For articles on qualification, see Qualifying For a Mortgage.

Related Terms

Other terms related to 'Qualification' starting with the letter 'Q'

Qualification ratios, Qualification rate, Qualification requirements

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