We encourage members to be responsible about their banking, and this includes using credit wisely. Collateral Collateral may make the loan safe, but not necessarily sound. Provides incentive for member to repay the loan. Provides a means of at least partial recovery if loan defaults. Collateral should not be considered as a source of repayment.
Capital Provides a cushion for repayment in the event of the member having a financial setback.
Indicates an ability and willingness of the member to save and accumulate assets. Lack of accumulated worth could be a danger signal unless the applicant is fairly young. Credit Represents accumulated experience of the member's habits in performing credit obligations. Provides a record of past credit experience. If there is a problem, a full and satisfactory explanation should be received.