During the early twentieth century, the lending institutions (mostly banks) were involved in advancing loans but the loans were taken for a specific purpose and were mostly taken by corporations, proprietors, and firms.
The creditworthiness of an individual or entity is the ability to pay back or settle the debt without any defaults made.
Personal loans are economic tools used by people to get financial assistance from financial institutions (mainly banks and non-banking financial companies) in the situations of adversities as well as pleasant times.
Getting a personal loan is an effortless task but repaying a loan will always require a lot of effort on the part of the borrower.
The creditworthiness of the borrower is something the banks and NBFCs (Non-Banking Financial Companies) will consider very cautiously while they are processing the personal loan application of the borrower.