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Financial Servicing > Loan Servicing for Small Business Lending > Flashcards

Loan Servicing for Small Business Lending Flashcards

1
Q

What are the two primary stages in the life of a small business loan?

A

Loan origination and loan servicing.

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2
Q

Why do lenders assess a borrower’s credit worthiness?

A

To mitigate the risk of loan default.

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3
Q

Who is typically listed as the borrower in a small business loan?

A

The business name.

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4
Q

When does a small business loan become delinquent?

A

The day after a payment is missed.

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5
Q

What is a problem loan?

A

A loan with payments past due for 90 days or more.

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6
Q

What is the main goal when contacting delinquent borrowers?

A

To resume scheduled loan payments.

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7
Q

What is a grace period?

A

An allowance for a borrower to make up missed payments.

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8
Q

What is an automatic loan payment?

A

Scheduled automatic debits from borrower’s account by lender.

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9
Q

What is bankruptcy?

A

Legal process allowing borrower to discard or repay debt.

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10
Q

What is collateral in loan servicing?

A

Assets accepted by lender as security for a loan.

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11
Q

What is a DDA (Demand Deposit Account)?

A

Checking or savings account allowing withdrawals without notice.

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12
Q

What does it mean when a loan is in default?

A

Failure to repay loan as per terms agreed.

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13
Q

What is deferment in loan terms?

A

Temporary period where borrower isn’t required to pay principal.

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14
Q

What does delinquent mean in loan servicing?

A

A loan with missed payments until borrower catches up.

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15
Q

What is the Dodd-Frank Act?

A

Law prohibiting unfair, deceptive, or abusive practices in finance.

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16
Q

What is the Fair Debt Collection Practices Act (FDCPA)?

A

The main federal law that governs debt collection practices. The FDCPA prohibits debt collection companies for using abusive unfair or deceptive practices to collect debts from you.

17
Q

What is forbearance in loan servicing?

A

Temporary postponement of payments where interest accrues.

18
Q

What is foreclosure?

A

Legal process allowing lender to claim assets securing a loan.

19
Q

What is a grace period?

A

A period allowing borrower to defer or extend payment due date.

20
Q

Who is a guarantor?

A

Person who guarantees loan repayment if borrower defaults.

21
Q

What is a loan term?

A

Length of time borrower has to repay the loan.

22
Q

What is refinancing?

A

Process of revising loan terms for a new, favorable contract.

23
Q

What is a UDAAP?

A

Unfair, deceptive, or abusive act or practice.

Financial Servicing (7 decks)

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