Signature Loan
What is a Signature Loan? A signature loan – or good faith loan – is a form of personal loan offered by financial institutions, like banks, that do not require collateral and only a borrower’s signature. The borrower chooses the purpose of the loan, and the interest rates can be higher due to the absence...
Advance Rate
What is an Advance Rate? An advance rate is a percentage of the collateral’s value, reflecting the maximum loan amount that a lender is willing to extend to a borrower. The advance rate is a lending risk assessment ratio used to determine the maximum loan value a borrower can secure, given the pledged collateral value....
Average Daily Balance Method
What is the Average Daily Balance Method? The average daily balance method is a method for calculating the amount of interest to be charged to a borrower on an outstanding loan. It is an accounting method that is most commonly used by credit card issuers to calculate financing charges applied to any outstanding balance you...
High-Ratio Loan
What is a High-Ratio Loan? A high-ratio loan is a type of loan with a high loan value relative to the value of the property used as collateral. High-ratio loans usually carry higher interest rates than loans with lower ratios. There is no certain standard for high-ratio loans, but loans with LTV exceeding 80% are...
Fixed Interest Rate
What is a Fixed Interest Rate? A fixed interest rate refers to a static interest rate that is charged on a liability – such as a mortgage, credit card, loan, or corporate bond. A fixed interest rate may apply to a liability’s entire term or over a partial period of its term. Understanding Fixed Interest...
