Loan Pricing

Loan Pricing Course Overview

This Loan Pricing course looks at the fundamentals and factors banks consider when pricing a loan. We will examine how interest rates, loan structures, and different characteristics of a loan can affect the loan’s pricing. This Loan Pricing course will also explore how a bank earns revenue and what affects its profitability. This course will include an interactive case study that shows you a practical demonstration using a risk rating and profitability model in Excel. We will also cover different levers that a credit analyst can use during client negotiations and how they can affect the pricing and profitability of a loan.

Loan Pricing Learning Objectives

Upon completing this course, you will be able to:

• Explain debt as a funding source, its pros, and its cons
• Identify loan types and their relative degree of profitability
• Define risk-adjusted return, and risk-adjusted return on capital
• Calculate and interpret an example risk rating
• Recommend pricing structures based on risk rating and loan type

Loan Pricing is an elective course of CFI’s CBCA® program

CFI’s Certified Banking & Credit Analyst (CBCA)® Program offers skills including credit evaluation, documentation, and review procedures. From beginners to advanced users, the CBCA® program is designed to help you become a world-class credit analyst.

Who should take this CBCA® course?

This Loan Pricing course is designed for current and aspiring Commercial Banking and lending professionals, including Relationship Managers, Credit Analysts, and Risk Management professionals seeking a more comprehensive understanding of loan pricing and profitability. This course provides a real-world perspective and a hands-on case study outlining how a financial institution would evaluate a client’s default risk and how they might structure borrowing accordingly to optimize risk-adjusted return on capital. The practical exercises, case study, and tools explored in this course will be useful for any credit professional or financial analyst that wishes to work in private lending, business banking, commercial banking, or corporate banking.