Unit 3 - Principles And Practice Of Bank Lending Flashcards
The lending code covers good practice in relation to:
Loans credit cards charge cards and current account overdrafts
When assessing the 3 c’s of the person aspect of a loan application, a lender considers the applicants..
Character, capacity, capital
The type of income which would be most attractive to a banker as the primary source of repayment for a loan would be the customers..
Salary
3 attributes of good security are:
Simplicity of title, stability of value, ability to turn an unviable lending proposition into a viable one
An attraction for a bank of using an automated credit scoring is because such a system:
Enables large volumes of loan applications to be processed quickly and consistently and profiled for risk
Which regulatory body, acting as the central bank sets the UK’s bank rate?
Bank of england
What is the difference between the way UK and USA calculate APR (annual percentage rate)
In the USA the APR does not take into account the effect of compounding interest
The standards of lending practice covers how many main areas?
6 for personal customers, 8 for business customers
Using the Campari mnemonic which is not one of the components? Amount, capability,Character, ability?
Capability
In terms of credit scoring, what does fico stand for?
Fair Isaac Corporation
When assessing the 4 c’s for the purposes of lending, which one is not a component of it? Connection, capability, capital, charges?
Charges
Using the PARSERS mnemonic for the purposes of lending, what does the letter E stand for? Expediency, extra, expenditure, experience.
Expediency
Which one of these is not a credit reference agency? Experian, fico, equifax, transunion?
Fico
In terms of good security, what does MAST test stand for?
Marketability, ascertainability, simplicity and transferability
Within the context of the standards lending practice, declined applications is covered in which category?
Business Only
When assessing types of assets as security for a loan, what are also known as “chattels”
Antiques, paintings and classic cara
What would not be an example of a customers “liability”
A property owned outright with no mortgage on it
What does LTV mean
Loan to value
Information held by a credit reference agency does not include:
Any parking fines/arrears
