UNDERSTANDING LENDING PRODUCTS I at IOB
What is UNDERSTANDING LENDING PRODUCTS I?
Consumer lending is the category of financing centered on individual and household consumers. It includes home and auto loans, as well as personal loans extended to people who use the funds for individual or family purposes.
Overview
It’s important to know how loans work before you borrow money. With a better understanding of them, you can save money and make better decisions about debt—including when to avoid acquiring more or how to use it to your advantage.
Frequently Asked Questions
What does lending process mean?
The lending process involves a series of activities that lead to the approval or rejection of a bank loan application. The loan department of a bank employs different credit professionals with unique roles and responsibilities that complement each other to make the lending process complete.
What are retail lending products?
Retail lending is a widely established business across the financial sector and garners a significant amount of profit for the lending institution. Popular retail lending products include personal loans, line of credit accounts, credit cards, home equity lines of credit, and mortgages.
What is an example of a consumer loan?
The most common types of consumer loans are – mortgage, auto loan, education loan, personal loan, refinance loan, and credit card.
What is digital lending?
Digital lending refers to the online disbursal of loans where all processes, even loan approval and recovery, take place remotely, typically through mobile apps. The shift is part of the digital transformation pushed by the pandemic.
What is an example of loan?
Common examples include home purchase loans, auto loans, personal loans, and many student loans. Revolving loans allow you to borrow and repay repeatedly.
What is loan and types of loan?
A loan is a sum of money that an individual or company borrows from a lender. It can be classified into three main categories, namely, unsecured and secured, conventional, and open-end and closed-end loans.
What is the principle of lending?
The lenders must do a proper credit assessment of the borrower. They must conduct due diligence. The lender must convey credit limits, terms and conditions and seek acceptance of the borrower in writing for the same. The rules stipulate that lenders must timely disburse the loan amount in their loan accounts.
How does a lending company work?
A lender is a financial institution that lends money to a corporate or an individual borrower with the expectation that the money will be repaid at a later date. Lenders require borrowers to pay interest on the amount borrowed, usually charged at a specific percentage of the total amount of loan.
What is lending in banking?
When a lender gives money to an individual or entity with a certain guarantee or based on trust that the recipient will repay the borrowed money with certain added benefits, such as an interest rate, the process is called lending or taking a loan.
Is credit card a lending product?
A credit line, personal loan, and a credit card are all unsecured lending instruments, which implies no collateral or security needs to be deposited to use credit via either of the three.
What is retail lending process?
Retail lending is the process of disbursing any form of loan to an individual customer. The retail lenders generally include banks, credit unions, savings u0026 loan institutions. However, today, Fintechs are also providing credit options to borrowers.
What is wholesale lending?
A wholesale mortgage lender is an institution that funds mortgages and offers them to third parties, such as a bank, credit union, mortgage broker or independent mortgage company or professional.
There are three main types of credit: installment credit, revolving credit, and open credit. Each of these is borrowed and repaid with a different structure.
What are the 5 types of financial institutions?
The major categories of financial institutions include central banks, retail and commercial banks, internet banks, credit unions, savings, and loans associations, investment banks, investment companies, brokerage firms, insurance companies, and mortgage companies.
What is the full meaning of loan?
A loan is when money is given to another party in exchange for repayment of the loan principal amount plus interest. Loan terms are agreed to by each party before any money is advanced. A loan may be secured by collateral such as a mortgage or it may be unsecured such as a credit card.