lending policies
Borrowing terms set
Lending policies are the rules and criteria financial institutions use to decide who qualifies for loans and on what terms.
These policies govern interest rates, required credit scores, collateral requirements, and debt-to-income ratios.
The bank tightened its lending policies after the housing crisis.
Lending policies balance institutional risk against the goal of extending credit.
- fixed ratesUnchanging interest percentages
- mortgagesLoans secured by property
- subprime mortgageHousing loan for unqualified borrowers
- down paymentInitial sum toward purchase
- closing costsFees finalizing property purchase
credit risk · credit score · employment history · usury laws · fine print · balloon payments · personal loans · residency status · age restrictions · grace periods · auto loans · licensing requirements · loan shark · redlining · debt-to-income ratio · prime rate · student loans · risk assessment