Loan payments of fixed amounts in regular installments to pay off the debt and interest over a fixed period
Annual Percentage Rate (APR)
A percentage rate that reflects the amount of interest earned or charged.
A short-term loan for borrowers who need more time either to find a longer term loan for a property or to sell the property.
Expenditure to purchase, upgrade or maintain fixed assets, such as land, buildings, and equipment
Cash Flow Statement
A financial statement showing the movement or flow of money in and out of a business. It is often used as a budgetary tool to assess the need for additional liquidity in the future.
An asset usually property pledged as security for repayment of a loan, to be forfeited in the event of a default.
A report detailing the credit history of the potential borrower used by banks and lenders to guage a person’s credit worthiness and their risk potential. Commonly used credit reports are CCRIS and CTOS reports.
A system that collects credit information on potential borrowers maintained by Bank Negara Malaysia. The CCRIS report helps lending organisation to review the potential borrowers credit history.
CTOS (Credit Tip-Off System) contain information on legal proceedings against individuals and business entities in Malaysia for loan defaults.
Taking one loan to pay off many others. The objective is to secure a lower rate of interest or to create a more manageable monthly payments.
Early repayment penalty
Penalty for paying off the entirety of the loan before the loan repayment period.
Effective Annual Interest Rate
Interest rate on a loan which is restated from the nominal interest rate to the interest rate with annual compound interest. The effective rate is always higher than the nominal interest rate.
The difference between a property’s market value and it’s outstanding mortgage amount.
Financial transaction in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount.
Fixed Interest Rate Loan
A loan where there is no fluctuation in the interest rate charged by the lender over the entire course of the loan
Floating Interest Rate Loan
A loan where interest varies according to Base Lending Rates (BLR)
An arrangement between the financial institution and the borrower that permits the borrower to draw down on the line of credit at any time to meet the day to day needs of the business, as long as he or she does not exceed the maximum set in the agreement.
A small loan, often aimed at small businesses or to help borrower get business started.
Net Operating Income
All income collected from operations minus all expenses incurred from operations
Pay Back Period
The period of time required to recoup the funds expended in an investment, or to reach the break-even point.
A promise made by an individual to repay a loan if the original borrower (usually a small business) defaults.
The income a business receives from the sales of products and services to the customers.
A type of loan where the borrower and lender agree upon some form of collateral (usually property) from the borrower to guarantee the loan should the borrower default.
July 16, 2014 / /