Finance Glossary
Responsible Lending
The principle — and legal obligation under FCA rules — that lenders must only approve credit when they have reasonable grounds to believe the borrower can afford to repay without undue hardship. Responsible lending requirements include affordability checks, creditworthiness assessments, and clear disclosure of loan terms. Breaches can result in FCA enforcement action.
Related guides
Related terms
Affordability Check
An assessment carried out by a lender to determine whether a…
Financial Conduct Authority
The UK's financial services regulator, responsible for overs…
Creditworthiness
A lender's overall assessment of how likely a borrower is to…
FCA Cost Cap
Rules introduced by the Financial Conduct Authority in Janua…
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