Credit appraisal is the assessment of risk that can impact on the repayment of loan. In short it is to determine, whether we will get our money back?
Depending on the purpose of the loan & the quantum, the appraisal process may be simple or elaborate.
For small personal loans credit scoring based on income, life style, existing liabilities may suffice.
For project financing, the project comprises technical, commercial, marketing, financial, managerial appraisals, etc
It is the process by which the lender assesses the credit worthiness of borrower. It revolves around character, collateral and capacity.