The five-tier classification refers to five levels of good, good, general, sub- and suspicious, according to the solvency and credit history of the bank. This level has a very strong impact on loans. So is level 5 focused on affecting loans? The problem is analysed from several angles。

Does level 5 focus on affecting loans

First, for clients, the impact of the five-level classification is clear. If the client is classified as good or good, the client receives a lower interest rate and a higher crediting level when applying for a loan; conversely, if classified as secondary or suspicious, the client may have to bear higher interest rates and lower loan lines. In addition, the fifth class of clients has an impact on the ability to apply for credit cards or even rent housing, so that clients should keep a good credit record at all times in order to obtain a better level of the fifth class and better loan terms。

Second, a level 5 classification is also important for banks. Banks determine the amount of loans, interest rates, counter-guarantee measures, etc. of clients based on the five-tier classification of customers. Banks use a five-tier classification as a basis for assessing the credit of their clients and consider stricter measures, such as additional collateral or guarantees, for customers who are convicted of being suspicious or sub-prime. At the same time, banks also set up client managers and crediters according to the five-tier classification of clients in order to better manage clients。

Thirdly, for the financial system as a whole, the level 5 classification is also an indicator of the performance of the economy. The fact that many clients in the financial system as a whole are classified as secondary or suspicious points to problems in the economic performance of the region. Thus, a five-tier classification is also an important indicator of economic health。

At this point, it can be concluded that a level 5 classification does affect loans. Not only would the five-tier classification of clients affect loan lines, interest rates, etc., but banks and the financial system as a whole would be able to assess and manage accordingly according to the five-tier classification。