According to the 5c principles of credit, the capacity of an individual borrower refers to

• The 5 C's of credit are a framework that lenders use to assess the creditworthiness of a borrower. "Capacity" refers to the borrower's ability to generate sufficient income to meet the loan repayments. Here's why it's the most relevant option:
-Focus on Repayment: A core principle of lending is the borrower's ability to repay. Capacity considers the borrower's income, employment stability, and debt-to-income ratio to assess this ability.