Loan Grading

A, B, C, D? Or worse. What's it gonna be?

Loans are graded, generally, based upon the borrower's ability and willingness to pay back the money they promised to pay back.

The higher the grade, the lower the interest rate given to the lender (usually). It accounts for the risk issues.

See: Credit Ratings. See: Junk Bonds. See: Moody's. See: Standard & Poor's - S&P.