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Positive float

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Positive float
See: Float


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In order to have positive float benefit, the short-term interest rate applied to the total number of days from prepayment to remittance must be high enough to offset the interest expense of the loan (pass-through rate) from the prepayment date to the end of the month.
The results are both greater profitability, because fewer bad payments occur, and better customer relationships because fewer deserving customers get caught in a false positive float decision.
 
 
 
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