loan commitment

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Loan commitment

Assurance by a lender to make money available to a borrower on specific terms in return for a fee.

Loan Commitment

The amount in loans that a bank will make or may be required to make in the near future, but has not yet made. Loan commitments may be open-ended or closed-ended. Suppose a bank approves two loans in a year; one is a revolving line of credit for $50,000 and the other is a business loan for $100,000. One would say that this bank has an open-ended loan commitment of $50,000 (because the principal amount in the loan, when repaid, may be borrowed again) and a closed-ended loan commitment of $100,000 (because once its principal is repaid, it no longer must be committed to that borrower). Banks must disclose their loan commitments.

loan commitment

In real estate,a formal promise by a lender to loan up to a specified amount of money, depending on the appraised value of the collateral, with additional details regarding the interest rate, term of the loan, property on which mortgage will be taken, and a date on which the commitment will expire.

References in periodicals archive ?
Flagstar Bank has said that it has completed a purchase of warehouse loan commitments.
RBS said the portfolio sold to CCB comprises GBP 594m of loan commitments with drawn assets of GBP 494m as of 31 July 2015 equivalent to risk weighted assets of approximately GBP 237m as of that date.
This transaction follows the announcement on 26 February 2015 of a sale to Mizuho of a portfolio of US and Canadian loan commitments.
The closing of the new loan facility shows that Merck has a very good reputation among its banks owing to its strong position, and that a long-term loan commitment can be obtained with good terms and conditions despite the current financial market turbulence," said Matthias Zachert, CFO of the Merck Group.
27 March 2012 -- Ralf Bedranowsky and Simon Booth, heads of Deutsche Bank's (FRA:DBK) shipping finance unit, said on Monday that loan commitments at the unit rose considerably in 2011, driven by the fast expansion in Asia, which accounted for 18.
Loan commitments and loans have different characteristics, making it difficult to directly compare the prices of these instruments.
Earlier in the autumn of 1998, Nissan secured a similar one-year loan commitment from a group of 10 Japanese banks, led by IBJ.
At the opening of the recent CGI meeting, the Leader of the Indonesian delegation, namely Coordinating Minister for Economic and Financial Affairs Saleh Afiff, did not hesitate to express his optimism that the CGI's loan commitment for Indonesia for 1997/1998 would not decline, saying that if Japan and the United States reduced their loan commitments, the Worm Bank and the Asian Development Bank would do something to compensate for the reductions.
Bank off-balance sheet activities in general, and loan commitments in particular, have grown rapidly in recent years (Hirtle 1987).
Royal Bank of Scotland (LSE: RBS) has announced that it has sold its corporate loan commitments portfolio.
27 June 2013 -- Boston-based Harbinger Group Inc's (NYSE: HRG) Salus Capital Partners LLC investment advisory subsidiary that it has surpassed USD 800m in loan commitments since inception.