Feb 2025

How to answer this Situational interview question about Borrower Risk Management for Mid-Level Lending Analyst?

How do you handle a situation where a borrower is unable to meet their repayment obligations?

Lending Analyst

Situational

Asked at

Bank of America

Difficulty :

Hard

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Explanation

This question evaluates your problem-solving skills, ability to manage risk, and approach to maintaining borrower relationships during financial difficulties. Recruiters are looking for candidates who can balance empathy with the bank’s interests. A strong answer will include steps to assess the situation, propose solutions like loan restructuring, and mitigate risk. Avoid failing to address communication with the borrower or neglecting long-term solutions.

Answer Example

If a borrower is unable to meet their repayment obligations, I first assess their financial situation through updated income statements or cash flow analysis. I then explore options like loan restructuring, extending the repayment period, or offering temporary payment deferrals. For example, I worked with a small business owner who faced cash flow challenges during a downturn, and we restructured their loan to lower monthly payments, which allowed them to recover financially while ensuring the bank recovered the principal over time. Open communication and tailored solutions are key to resolving such situations.

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Feb 2025

How do you handle a situation where a borrower is unable to meet their repayment obligations?

Situational

Asked at

Bank of America

Difficulty :

Hard

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Explanation

Answer Example

Also check out

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