Understanding Loan Contracts: Fixed vs Variable Rates, Insurance, & Home Equity, Slides of Management Fundamentals

Download Understanding Loan Contracts: Fixed vs Variable Rates, Insurance, & Home Equity and more Slides Management Fundamentals in PDF only on Docsity! Fixed-Rate Versus Variable-Rate Loans (cont’d) * Convertible loans begin as a variable rate loan and can be locked into the current rate a some predetermined time in the future. Docsity.com The Loan Contract Insurance agreement clause Acceleration clause Deficiency payments clause Recourse clause Docsity.com Deficiency Payments Clause ¢ Requires any amount in excess to be paid if the collateral's value does not satisfy the loan. ¢ Also requires payment of any outstanding charges incurred by the lender associated with the disposal of the collateral. ® Docsity.com Recourse Clause * Defines the lender’s ability to collect any outstanding balance — wage attachments and garnishments — liens on other property (secondary collateral) Docsity.com Special Types of Consumer Loans ¢ Home equity loans ¢ Student loans ¢ Automobile loans Docsity.com