Banking Terms & Concepts (Vocabulary) Flashcards
1
Q
Credit Risk Assessment
A
Definition: A process of evaluating the potential risks involved in lending to a borrower.
Example Sentence: “The bank conducted a thorough credit risk assessment before approving the loan application.”
Context: Common in lending and loan approval processes.
2
Q
Loan-to-Value Ratio (LTV)
A
Definition: A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
Example Sentence: “The bank offers a higher interest rate for loans with a higher loan-to-value ratio (LTV).”
Context: Used in mortgage and SME loan applications.
3
Q
A
