The best practices for making loans to consumers can be summarized by setting up procedures that follow the five (5) Cs of credit as follows:
* Character (is the prospective borrower ethical, have good values, etc.)
* Capacity (does the prospective borrower generate enough income to pay back the loan)
* Capital (does the prospective borrower have a high enough net work to backstop the debt)
* Collateral (will the prospective borrower use an asset to backstop or secure the debt)
* Conditions (is the borrower in a situation where additional debt makes sense and is the economy supportive of the bank offering such a loan)