Conditions, requirements, leniencies, penalties, and the like are stated clearly and precisely as components of a loan agreement. Specific items agreed to by the borrower and the lender are the loan amount, term, interest rate, and other enforceable conditions . Also refer to loan term.
Formula: Loan amount divided by the collateralized asset’s liquidation value times 100.
Maximum monies a lender values for a collateral asset to secure a loan. Lenders accept assets as a collateral that appraise at a minimum liquidation value of 25 percent higher than the loan amount. The difference between a collateralized asset’s market value and loan advance amount is known as the haircut. The overage is to cover liquidation and other charges in case of a foreclosure.
Delinquent borrower’s payoff routine worked out with a lender. Rescheduling the loan, having a longer payback period, having smaller installment amount are typical conditions. Staves off further delinquency and likely foreclosure.
Loans with higher-than-normal interest rates are the vehicles this mutual fund invests in. This fund is for stable and successful firms with low credit ratings due to age, industry, and the like. Not investment-grade loans. Secured by the firm’s assets, making them higher quality than junk bonds. Loan participation funds offer higher yields than the investment-grade funds due to their high interest earnings. Also known as floating rate fund.
A bank’s total loan amounts divided by its total amount of deposits times 100. This ratio measures outstanding loans versus the total deposits on hand on a day-to-day basis as a indicator of bank liquidity.
Money amount periodically due as a loan payment term.
The amount borrowed in relation to the actual value of the property.
Bank or finance company’s daily total loan value.
Loans on the books as assets, committed to by the lending institution, ready for full disbursement, waiting for the closing.