Credit Score
What is a Credit Score? A credit score is a number representative of an individual’s financial and credit standing and ability to obtain financial assistance from lenders. Lenders use the credit score to assess a prospective borrower’s qualification for a loan and the specific terms of the loan. Essentially, it is used to determine the...
Bank Line
What is a Bank Line? A “bank line” or a “line of credit” (LOC) is a kind of financing that is extended to an individual, corporation, or government entity, by a bank or other financial institution. This type of credit is different from term loans, such as housing mortgages or car loans. Usually, the borrowers...
Debt Restructuring
What is Debt Restructuring? Debt restructuring is a process wherein a company or an entity experiencing financial distress and liquidity problems refinances its existing debt obligations in order to gain more flexibility in the short term and make their debt load more manageable overall. Reason for Debt Restructuring A company that is considering debt restructuring...
Recovery Rate
What is Recovery Rate? Recovery rate, commonly used in credit risk management, refers to the amount recovered when a loan defaults. In other words, the recovery rate is the amount, expressed as a percentage, recovered from a loan when the borrower is unable to settle the full outstanding amount. A higher rate is always desirable....
Double Gearing
What is Double Gearing? Double gearing refers to the practice of borrowing money against an asset, with the money being used to buy shares of stock. Then, more money is borrowed against the shares to establish a margin loan that can be used to purchase even more shares. In short, double gearing is a form...
