Guide to Loan terms

Written by John Mussi


Continued from page 1

Debt Amount owed to another that must be repaid.

Default Failure to repay a loan according torepparttar terms ofrepparttar 136658 loan.

Delinquency Failure of a borrower to make a timely payment on a loan.

Interest Fee charged forrepparttar 136659 use of money.

Interest Rate The amount of interest charged on a loan, usually expressed as a percentage.

Lender Entity that provides loan funds torepparttar 136660 borrower. Depending onrepparttar 136661 type of loan,repparttar 136662 lender may be a bank or other financial institution.

Loan Money borrowed from a lending institution, usually repaid with interest.

Loan Applicant Party applying torepparttar 136663 lender for a loan.

Note Binding legal document you sign when you get a loan. It listsrepparttar 136664 conditions under which you're borrowing andrepparttar 136665 terms under which you agree to pay backrepparttar 136666 loan (also called a promissory note or a mortgage note).

Payment Periodic (usually monthly) instalments paid to a lender to be applied toward repaying your loan.

Principal Loan amount borrowed from a lender, not including interest or additional fees.

Repayment Process of paying back borrowed money.

Term Time limit within which a loan must be repaid.

Variable Interest Rate Interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.

You may freely reprint this article providedrepparttar 136667 author's biography remains intact:

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.


Home Equity Loan Improvements

Written by Marc Sylvester


Continued from page 1
* A description and itemization of loan fees thatrepparttar lender charges to open, use, or maintainrepparttar 136657 account. These can be stated as dollar amounts or percentages. You must also give a total dollar estimate of fees imposed by third parties and inviterepparttar 136658 customer to request more specific information. * The fact that negative amortization may occur and that it increasesrepparttar 136659 principal balance and reducesrepparttar 136660 customer's equity. * Any limits onrepparttar 136661 number and size of credit extensions within any time period and any minimum balance or draw rules, stated as a dollar amount. * A statement thatrepparttar 136662 customer should consult a tax advisor regardingrepparttar 136663 deductibility of interest and charges. Q. If we offer a variety of home equity plans, are we required to have a separate disclosure notice for each one? A. No. The bank can choose to devise a separate plan disclosure for each home equity product or to use a more generic disclosure to cover all of them. If you use individual disclosures, you must inform customers that they should inquire about other options. If you use a single generic disclosure, you are required to spell out any linkages or relationships affectingrepparttar 136664 availability of certain terms. For instance, if you tellrepparttar 136665 customer that your home equity loans are available with certain payment plans, and ifrepparttar 136666 customer's opportunity to select these payment plans varies based on other loan terms, these restrictions would have to be explained. An example of such linkages: Say a bank offers two plans, one with a five-year term andrepparttar 136667 other with a ten-year term. The bank permits interest-only payments underrepparttar 136668 five-year plan, but requires payments of interest and principal underrepparttar 136669 ten-year plan. A generic disclosure would have to point out such a difference. Q. Where do we getrepparttar 136670 brochure that must be given out? A. You can either userepparttar 136671 model brochure provided byrepparttar 136672 Federal Reserve Board or develop your own that is "substantially similar." If you want to userepparttar 136673 Fed's version, you can obtain a limited number of original copies from your Federal Reserve Bank and reprint them verbatim. You could also reprintrepparttar 136674 Fed brochure withrepparttar 136675 bank's name and logo. Q. The disclosures that go onto application forms seem fairly straightforward. But I foresee difficulties sendingrepparttar 136676 required notices out within three days for telephone, third-party, and magazine insert applications. Is this going to be a management problem area? A. Undoubtedly. You need to have a system and training for handling these applications. Staff should be directed to note them on a special log identifyingrepparttar 136677 applicant,repparttar 136678 time of receipt, andrepparttar 136679 source ofrepparttar 136680 application. You then need to generaterepparttar 136681 required disclosures and recordrepparttar 136682 date they were sent. Q. We must discloserepparttar 136683 circumstances under which we can changerepparttar 136684 terms ofrepparttar 136685 plan and whatrepparttar 136686 changes may be. These could grow quite lengthy. Must they all be included inrepparttar 136687 early disclosures? A. No. You can include them all if you want to; if you do, you need not group them withrepparttar 136688 other early disclosures. However, if you prefer, you can simply disclose thatrepparttar 136689 borrower may obtain a list ofrepparttar 136690 conditions under whichrepparttar 136691 lender could take these actions. In either case,repparttar 136692 segregated disclosures must state thatrepparttar 136693 lender hasrepparttar 136694 right to terminate, accelerate, prohibit new advances, reducerepparttar 136695 credit line, or make other changes. You must also staterepparttar 136696 fees for termination. Management tip: Designate which employees haverepparttar 136697 authority to terminate or changerepparttar 136698 plan terms. Then make sure these employees understandrepparttar 136699 rules. Permitting decentralized decision-making could lead to legal and customer relations problems. Q. Our bank's home equity lines can be accessed with a credit card. Do we have to incorporaterepparttar 136700 new credit card early disclosures (ABA BJ, June, p. 14) into those for our home equity plan? A. No. The Federal Reserve's new credit card rules specifically excluded such plans. Initial Disclosures Q. What isrepparttar 136701 difference between "early" disclosures and "initial" disclosures? A. The early disclosures arerepparttar 136702 ones added by this regulation--those that must be provided withrepparttar 136703 application. The initial disclosures arerepparttar 136704 main Truth-in-Lending disclosures that have always been required at or before loan consummation. Q. Doesrepparttar 136705 new rule affectrepparttar 136706 initial disclosures we must make? A. Yes. You must include inrepparttar 136707 initial disclosuresrepparttar 136708 early disclosure terms that do not duplicate already-required initial terms. In addition,repparttar 136709 initial disclosures must includerepparttar 136710 full list ofrepparttar 136711 conditions under whichrepparttar 136712 bank can terminate or modifyrepparttar 136713 plan, incorporating, of course,repparttar 136714 restrictions described earlier. It is not sufficient here to simply tellrepparttar 136715 customer that he may obtain such a list, in contrast torepparttar 136716 early disclosure requirements. Loan Agreement Q. Doesrepparttar 136717 regulation require changing our standard loan agreements? A. Very likely. As explained earlier, you must assure thatrepparttar 136718 agreement uses a publicly available index beyond your control; that it only permits early termination withinrepparttar 136719 circumstances permitted byrepparttar 136720 regulation; and that any provision for changing terms spells out specifically bothrepparttar 136721 triggering event andrepparttar 136722 resulting change. An example ofrepparttar 136723 latter: For an employee preferred-rate plan,repparttar 136724 contract must provide that a specified higher rate will apply ifrepparttar 136725 borrower's employment byrepparttar 136726 lender ends.

http://www.imdollar.com/home-equity-loan http://www.imdollar.com/



Marc Sylvester is expect based in Edison, NJ . He holds expertise in the banking and finance sector and is a consultant to leading business houses.


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