Which factor is most likely to influence a bank's lending decision?

The borrower's employment status is a crucial factor that significantly influences a bank's lending decision. Lenders assess a borrower's ability to repay a loan, and having stable employment indicates a reliable income source. This stability reduces the perceived risk associated with extending credit.

When a borrower is employed, especially in a steady job, it suggests that they have the means to meet monthly repayment obligations. Employment status also reflects the borrower’s financial stability and overall creditworthiness, as it often correlates with their ability to manage expenses and make timely payments.

In contrast, while a borrower's relationship with the bank, current market rates, and government policies are important considerations, they do not directly address the individual's capacity to repay the loan in the same way that employment status does. The underlying income derived from stable employment speaks to the potential for future financial reliability, which is central to a bank's risk assessment during the lending process.