What is credit ceiling?

A credit ceiling is the maximum amount of credit that a lender, such as a bank or financial institution, is willing to extend to a borrower. It sets a limit on how much debt an individual or organization can incur based on their creditworthiness and financial situation. Credit ceilings help manage risk for lenders while also guiding borrowers in their borrowing decisions. This limit can vary depending on factors like income, credit history, and existing debt levels.