. How to Repay the Remaining Principal Balance on a Bullet Loan What is a revolver term loan? A revolver term loan is a type of loan in which the borrower can choose to draw down the loan in installments over a period of time, or to “revolve” the loan by reborrowing any repaid funds. … Read more
An evergreen loan is a type of loan that is typically structured as a line of credit that can be drawn upon at the borrower’s discretion. The loan is “evergreen” because it does not need to be repaid in full until the borrower decides to do so, and there is no set maturity date. Evergreen … Read more
The money factor definition is the rate used to calculate the monthly finance charge on a loan. This rate is expressed as a decimal, and is typically between 0.001 and 0.1. To calculate the monthly finance charge, the money factor is multiplied by the average daily balance of the loan. Why is 2400 used in … Read more
Risk-based pricing is the practice of setting the interest rate on a loan based on the borrower’s credit risk. The higher the borrower’s credit risk, the higher the interest rate will be. This is because lenders want to offset the increased risk of default by charging a higher interest rate. Risk-based pricing is used by … Read more
A set-off clause is a clause in a loan agreement that allows the lender to set off any unpaid debts owed by the borrower against any money that the borrower subsequently owes the lender. This means that if the borrower falls behind on their repayments, the lender can take the money that the borrower owes … Read more
The term “without recourse” is often used in relation to loans. When a loan is made “without recourse”, the lender cannot come after the borrower for any additional payments if the borrower defaults on the loan. This means that the lender is taking on all of the risk associated with the loan. What is a … Read more
