Definition Of

Loan Pricing

Loan pricing means determining the interest rate for granting loan to creditors, be it individuals or business firms. It is one of the most important, however difficult task in lending funds to business firms & other customers. Because it is always very difficult to exactly know what the actual loan risk a particular loan application is. Generally the lender wants to charge a high enough rate to make sure that the loan will be profitable as well as it will covers enough compensation against the default risk. On the other hand loan price must be set low enough that helps the customers to find it easy for successful repayment of loan.

Share it:

More from this Section

  • Title Deeds
    Title Deeds are documents which prove who owns a property and under what term
  • Westpac Banking Corporation
    Westpac Banking Corporation is Australia’s First Bank, committed to providing customers with solution focussed, reliable and easy to
  • Remitting Bank
    Remitting Bank under documentary collections the bank to which the principal (exporter) has entrusted the handling of a collection.
  • Non-Recourse Discounting
    Non-Recourse Discounting is purchase from the seller of accepted term Bills of Exchange at a discount to allow for funding of the
  • Performance Bond/Guarantee
    Performance Bond/Guarantee safeguard against the party to whom the commercial contract is awarded failing to meet an obligation under
  • Universal Bank
    Universal Bank is a bank or a financial institution that has the legal authority to offer all financial services and may, thus, be engaged in
  • Consignment
    Consignment is a method of financing trade. When goods are shipped on a consignment basis, related shipping documents are dispatched either