Aval – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What is an Aval?How Does an Aval Work?Aval and Credit Ratings What is an Aval?Aval refers to a written guarantee by a third party attached to a debt obligation which assures that a bill of exchange will be paid at maturity. The third party...

Systematically Important Financial Institution – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What is a Systemically Important Financial Institution?How Does a Systemically Important Financial Institution Work?Criticisms of SIFIs What is a Systemically Important Financial Institution?A Systemically Important Financial Institution...

Average Daily Balance Method – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What is the Average Daily Balance Method?How Does the Average Daily Balance Method Work?Effect on Balances What is the Average Daily Balance Method?The average daily balance is a method of calculating interest rate by factoring the balance...

Average Outstanding Balance – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What is an Average Outstanding Balance?Calculate the Average Outstanding BalanceCredit Score Factors What is an Average Outstanding Balance?The average outstanding balance is a calculation used in short-term, revolving loans, such as credit...

Federal Advisory Council – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What is a Federal Advisory Council?How Does a Federal Advisory Council Work? What is a Federal Advisory Council?The Federal advisory council or (FAC) is an organized body that makes consultations with and advises the Federal Reserve Board of...

Parallel Loan – Explained

by TheBusinessProfessor | Feb 23, 2025 | Banking, Lending, and Credit Industry

Update Table of Contents What is a Parallel Loan?How Does a Parallel Loan Work?Example of How a Parallel Loan WorksPros and Cons of a Parallel LoanSpecial Considerations for a Parallel Loan What is a Parallel Loan?A parallel loan is a type of loan in which two...