An asset refers to any valuable resource owned by a borrower that can be used to secure a loan. Assets can be tangible, like real estate, vehicles, or equipment, or intangible, like stocks and intellectual property. In loan management, accurately assessing and monitoring assets is essential for determining loan eligibility, setting collateral requirements, and minimizing… Continue reading Asset
An APR Calculator is a tool used to determine the Annual Percentage Rate (APR) of a loan, providing a complete view of borrowing costs by including interest, fees, and other charges. This calculation helps users easily compare loan offers and make informed financial decisions. By standardizing the total cost of loans, the APR Calculator becomes… Continue reading APR Calculator
In a lending organization asset tracking is a part of collateral management. It refers to the process of monitoring and managing assets used as collateral for loans or other financial agreements. This practice ensures that the collateral’s value remains sufficient to cover the obligations and mitigates the risk of default. It involves identification of the… Continue reading Asset Tracking
An Adjustable-Rate Mortgage (ARM) is a loan in which the interest rate fluctuates periodically over the loan term. This differs from fixed-rate mortgages, where the interest rate remains constant throughout. ARMs typically have an initial period of fixed interest rates, followed by adjustments based on a financial index and a margin. A Loan Management Software… Continue reading Adjustable-Rate Mortgage (ARM)
An amortization schedule is a table that outlines the precise repayment plan for an amortized loan, such as a mortgage or auto loan. It breaks down each payment into two components: principal and interest. The principal is the portion of the payment that reduces the outstanding balance of the loan, while the interest is the… Continue reading Amortization Schedule
Accrued interest refers to the interest that has been earned but not yet paid on a loan, deposit, or investment. It represents the amount of interest that has accumulated over a period of time, typically since the last interest payment date. In the context of loans, accrued interest is the amount of interest that has… Continue reading Accrued Interest
Annual Percentage Rate (APR) is a crucial metric that reflects the total cost of borrowing money over a year. It goes beyond the simple interest rate by factoring in all loan-related charges, giving borrowers a clearer picture of the true cost of the loan. So, APR includes: Loan Management Software can calculate and display the… Continue reading Annual Percentage Rate (APR)
An amortized loan is a type of loan where the borrower makes regular, periodic payments that cover both the principal amount borrowed and the interest charged on the outstanding balance. The distinguishing feature of an amortized loan is that each payment is divided into two parts: a portion goes towards paying off the interest accrued… Continue reading Amortized Loan
Amortization refers to the gradual spreading of the total loan cost (principal amount) and the interest accrued over the entire loan term. Each of your regular loan payments is divided into two portions, principal and interest. A loan management software can help with amortization by generating and tracking an amortization schedule. This schedule details each… Continue reading Amortization
ACH (Automated Clearing House) Payments are electronic fund transfers that occur through the ACH Network, a secure financial network used to process payments in the United States. This method enables the direct transfer of funds between bank accounts, making it a popular choice for payroll, direct deposits, bill payments, and online transactions. ACH Payments are… Continue reading ACH Payments
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