The steps that are taken in order to determine if an individual meets the requirements of a lending institution for a loan. It also assesses their ability to pay of the loan in the future. The ratios exist between the money the person has to repay to the financial insititution compared with the money they are able to earn.

More On This Topic

Link to This Definition
Did you find this definition of QUALIFYING RATIOS helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary