Who Evaluates Bank Loans?
Who Evaluates Bank Loans? The lending process involves a series of activities that lead to the approval or rejection of a bank loan application. The loan department of a bank employs different credit professionals with unique roles and responsibilities that complement each other to make the lending process complete. Loans are one of the primary...
Variable Rate Loans
What are Variable Rate Loans? A variable rate loan is a type of loan where the interest changes according to changes in market interest rates. Unlike a fixed-rate loan, where borrowers pay a constant interest rate, a variable rate loan comprises varying monthly or quarterly payments that change according to market interest rate changes. Lenders...
Secured vs Unsecured Loans
What are Secured vs Unsecured Loans? When planning to take out a personal loan, a borrower can choose between secured vs unsecured loans. When borrowing money from a bank, credit union, or other financial institution, an individual is essentially taking a loan. The bank has the discretion to decide whether to require the borrower to...
Amortizing Loan
What is an Amortizing Loan? An amortizing loan is a type of credit that is repaid via periodic installment payments over the lifetime of a loan. Installments are typically monthly payments, but not always. Each periodic payment includes both a principal portion and an interest portion. Amortization refers to the reduction in loan principal outstanding....
Restrictive Covenants
What are Restrictive Covenants? Restrictive or negative covenants are a type of non-financial covenants that limit the borrower from engaging in a certain activity or keep it from exceeding a predetermined limit. They are called “negative” debt covenants because they impose restrictions or create certain boundaries for the borrower that it is not supposed to...
