A savings and loan association is a financial institution that focuses on providing mortgages to its members, often with competitive interest rates and more lenient lending criteria. Members have voting privileges, but the association’s fortunes are tied to the real estate market and its limited membership base can make it vulnerable during economic downturns. Over […]
Loan shares and debentures are types of fixed income collateral. Loan shares can be unsecured or convertible, while debentures are secured loans without specific collateral. Both benefit companies by freeing up property for other financing. A loan share is a type of fixed income collateral, a loan that is made to a business. Although the […]
Auto loan amortization involves making regular repayments on a car loan over a specified period of time. The repayment amount depends on the interest rate, loan period, and loan amount, and can be calculated using a formula. Each repayment includes a portion for interest and a portion to reduce the principal debt. An auto loan […]
Loan committees, consisting of senior executives and experienced financial managers, review loan applications that fall outside the bank’s loan officer’s authority or require special attention. They analyze financial statements, credit statements, and other data to determine the best course of action, assess risk exposure, and ensure regulatory compliance. They also review loan reports and management […]
An inheritance loan is a cash advance against an expected inheritance, usually based on an estate payment within a few years or in probate. The main advantage is quick access to cash, but a portion of the inheritance will be collected by the financial institution. It is important to weigh the pros and cons and […]
Securities lending involves transferring ownership of assets from one party to another to generate profit. Institutional investors such as pension funds and hedge funds are typical borrowers, and collateral is used to offset risk. Lenders retain ownership rights but lose voting benefits. Risks include counterparty risk, but lenders can mitigate this through credit checks and […]
A loan sale is when a loan holder sells the loan to interested parties, often generating immediate cash for the institution. In some cases, a government-sponsored financial institution conducts a loan sale when a bank fails. Borrowers are usually notified once the loan sale is complete, and the sale does not require borrowers to be […]
A broker loan is a loan made by a bank to a brokerage firm for various purposes, including funding margin accounts and underwriting new securities. The interest rate is called the broker’s lending rate and the loan is due with 24 hours notice. It can also refer to a loan made by a broker to […]
Loan officers have various responsibilities, such as overseeing loan applications, evaluating loans, and helping clients with financial data. They can work in banks, lending institutions, real estate agencies, or collection agencies. A degree in business, finance, or economics is helpful, but not always required. A loan officer can have many different tasks and responsibilities depending […]
Loan prequalification is a simple process that helps homebuyers determine how much money they can spend on a new home and what their monthly payments will be. A loan officer evaluates the buyer’s income, debt, assets, credit, and employment status to provide an estimate. Prequalification gives buyers a better chance of getting the home they […]
A loan loss reserve is an accounting method used by banks to reflect the risk of potential losses from unpaid loans. The reserve is listed as an asset on balance sheets and is adjusted through charge-offs, recovered loans, provisions for credit losses, and adjustments based on the bank’s loan portfolio. A loan loss reserve is […]
Collateralized loan obligations (CLOs) pool loans from various businesses and resell them to multiple lenders to make the financial system more efficient. However, CLOs add complexity and were blamed for contributing to the 2007 banking crisis. They involve commercial business loans, bonds, and mortgages, and lenders receive different payment levels based on risk. The system […]
Below-market interest rates are lower than average rates and are typically offered by government programs to stimulate economic development and provide affordable housing options for low- to moderate-income individuals. Eligibility criteria include income restrictions, limitations on the number of properties owned, and requirements that the loan be on the borrower’s principal residence and sold to […]
The subsidized Stafford loan is a fixed interest rate loan offered by the US government to cover educational expenses. It does not accrue interest while the borrower is in college and is not credit-based. Eligibility requires completing the FAFSA and being enrolled at least half-time in an accredited program. The loan amount is limited by […]
A loan ledger tracks due dates for loans issued by a lender, organized chronologically. It includes borrower name, loan account number, amount owed, and due date. Some lenders add contact info and details of co-signers. Electronic versions allow for notes and reminders to be added. A loan ledger is a ledger or journal used to […]
Loan closers acquire necessary loan documents, schedule loan closings, check documentation accuracy, and enter data into computer systems. They ensure complete and accurate information and may contact parties for additional documents. Qualifications include communication skills and mathematical ability. They are valuable to organizations and help people make big purchases. A loan closer is normally responsible […]
Choosing the best loan management service involves evaluating cost, technical requirements, and customer service value. Analyzing cost and matching services to specific industries can help determine the best fit. Look for affiliations with reputable firms and determine if the company is truly working to help customers save. Choosing the best loan management services means evaluating […]
Tips for completing a payday loan application include reading loan details, verifying eligibility, being honest, knowing rates and fees, reviewing multiple applications, and providing accurate information. It’s important to research the company and ensure information is secure before submitting an online application. The best tips for completing a payday loan application include reading all of […]
A mortgage loan officer helps people buy property by determining appropriate loans and assessing creditworthiness. They work for financial institutions and may handle other types of loans. A bachelor’s degree in finance or business is common, and pay is based on fees. They work closely with real estate agents and must have excellent people skills […]
The business loan underwriting process involves evaluating the credit score, profit margin, and debt service to coverage ratio of the borrower. Other factors include demand for the product or service, location, advertising costs, and competition. Lenders are unlikely to lend the full amount for property purchases. The process requires expert risk estimation skills. The business […]
