Indexed Loan

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Indexed Loan

A loan with a payment that changes periodically. For example, the payment may increase if the Consumer Price Index rises to a certain level. Likewise, it may fall if the CPI drops. An indexed loan protects against risks such as inflation risk that would reduce the yield for the lender. Indexed loans are most commonly long-term loans as the changing payment reduces the uncertainty attached to any long term investment. See also: Variable-rate loan.
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Commercial Loan Software System for the indexed loans of the Housing Finance Fund of Iceland to replace the current system.
Interests should be charged only from declining sum of the loan, while indexed loans should be prohibited, the National Bank said.
Indexed loans with crop insurance for farmers (Malawi).
The basis swap provides protection against basis risk from the 91-day T-bill indexed loans and three-month LIBOR indexed floating-rate notes.
The decline in the net interest margin from the trailing quarter reflected the effect of the Federal Reserve's interest rate reductions on prime-rate indexed loans, as well as the impact of a higher level of non-performing loans.
Aggressive deposit pricing and the use of interest rate floors on over $360 million of the Corporation's rate prime indexed loans helped preserve the Corporation's net interest margin.
The decrease in interest and dividend income was due to an increase in non-performing loans and lower yields on indexed loans (approximately 65% of the Company's loans are indexed to Prime or Libor, although 51% of these loans have interest rate floors of which approximately 75% are now active).