The-definition.com

Definition

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:  Cite

More from this Section

  • Coordination-of-benefits provision
    Coordination-of-benefits provision in a group medical expense plan that prevents over-insurance ...
  • Home equity loans
    Home equity loans is the credit extended to an individual or family on the basis of the ...
  • Defined-benefit plan
    Defined-benefit plan is a type of pension plan in which the retirement benefit is known ...
  • Discount a Bill
    Discount a Bill is to discount a bill means to purchase a Bill of Exchange before it is ...
  • Devaluation
    Devaluation is a downward change in the official parity of an exchange rate from that ...