Whenever a bank gives a loan, it takes a risk — the risk that the borrower may not repay on time or at all. Understanding loan risk helps both banks and borrowers make better financial decisions.
In Bangladesh, banks operate under strict credit rules due to past loan defaults and economic uncertainty. Because of this, banks carefully analyze loan risk before approving any loan.
Credit risk is the risk that the borrower will fail to repay loan installments. This is the most important risk banks evaluate.
Income risk refers to uncertainty about the borrower’s future income. Job instability, seasonal income, or declining business revenue increase this risk.
Even profitable businesses can face cash flow problems. If cash inflow timing does not match EMI schedules, repayment risk increases.
For secured loans, banks assess whether collateral value is sufficient and easy to recover. Weak or illiquid collateral increases risk.
Past repayment behavior, discipline, and financial habits matter. Frequent delays or irregular payments signal higher risk.
| Risk Factor | What Banks Check |
|---|---|
| Income | Stability, source, and sustainability |
| CIB report | Past loan and credit card repayment behavior |
| Liabilities | Existing loans, EMIs, guarantees |
| DSCR / affordability | Ability to repay comfortably |
| Collateral | Value, ownership, and liquidity |
Loan eligibility determines whether you qualify on paper. Loan risk determines whether the bank feels safe lending to you. Both must be acceptable for approval.
No. Banks evaluate income, behavior, credit history, liabilities, and collateral together.
Sometimes. Lower-risk borrowers may receive better terms, depending on bank policy.
Yes. Acting as guarantor exposes you to repayment risk if the main borrower fails.
Yes. Consistent good financial behavior gradually reduces perceived risk.