What is one key factor that lenders evaluate when assessing a borrower's ability to repay a loan?

A credit score is a crucial metric that lenders scrutinize when determining a borrower's capacity to repay a loan. This score is a numerical representation of a borrower's creditworthiness, reflecting their past borrowing habits, repayment history, and overall financial behavior. A higher credit score indicates to lenders that the borrower is more likely to meet their repayment obligations, as it suggests responsible credit management and lower risk of default.

While property location, interest rate, and loan term play important roles in the broader context of the lending process, they do not directly assess a borrower’s financial reliability to the same extent that a credit score does. Property location might influence the property's value and marketability, the interest rate can affect the cost of borrowing, and the loan term specifies the duration for repayment, but none of these factors provide insight into the borrower's personal financial history and likelihood of timely loan repayment, as a credit score does. Thus, evaluating a borrower's credit score is a fundamental step for lenders to gauge repayment ability.