loan commitment
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Loan commitment
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.