2. TOPIC
BANKS LOAN
SUBMITTED BY
POOJA.C.BALOCHIA
SUBMITTED TO
UNIVERSITY OF MUMBAI
PROJECT GUIDE: PROF.GURUNATHAN PILLAI
T.Y.B.COM {BANKING AND INSURANCE} SEM-V
RAJASTHANI SAMMELAN’S
GHANSHYAMDAS SARAF GIRLS’S COLLEGE,
AFFILLIATED TO UNIVERSITY OF MUMBAI
ACCREDITED BY NAAC WITH ‘A’ GRADE
AND
DURGADEVI SARAF JUNIOR COLLEGE
{ARTS & COMMERCE}
S.V ROAD MALAD {W}, MUMBAI-400064
YEAR 2010-2011

3. DECLARATION
I Ms.POOJA.C.BALOCHIA student of Ghanshayamdas saraf Girls’
College of Arts & Commerce, Malad {W}.T.Y.B.I {Semester v},
Has completed project of BANKS LOAN in the academic year
2010-2011.This information submitted is true and original to the
best of my knowledge.
Date Signature of Student

4. RAJASTHANI SAMMELAN’S
GHANSHYAMDAS SARAF GIRLS’S COLLEGE,
AFFILLIATED TO UNIVERSITY OF MUMBAI
ACCREDITED BY NAAC WITH ‘A’ GRADE
AND
DURGADEVI SARAF JUNIOR COLLEGE
{ARTS & COMMERCE}
S.V ROAD MALAD {W}, MUMBAI-400064.
CERTIFICATE
I Prof.GURUNATHAN PILLAI hereby certify that
Ms.POOJA.C.BALOCHIA of Ghanshyamdas saraf Girls’ College
{Arts & Commerce} bachelor of Banking & Insurance of TYBI
{Semester v} has completed project on BANKS LOAN In the
academic year 2010-2011.This information is true and original
to the best of my knowledge.
External examiner
Date
Project coordinator
Date Principal
College seal

5. ACKNOWLEDGEMENT
I would like to thank University of Mumbai and my college for
giving me this opportunity for taking such a challenging project,
Which has enhanced my knowledge about BANKS LOAN
I gratefully acknowledge and express deep appreciation to
many people who have made this project possible. Mere thanks
to Prof. GURUNATHAN PILLAI my project guide without his
support, motivation and suggestion this project would not have
been possible.I wish to thank her for all useful discussion and
timely suggestion of related topic and valuable help during the
project. Also I would like to thank the informal but related help
provided by my friends to me.
Date Signature of student

6. TOPIC:-
BANKS LOAN

7. SR INDEX PG NO
NO
1 meaning, definition, history, 1-9
Regional banks benefit by avoiding loan
trouble
2
Types of banks loan, advantages 10-19
and disadvantages of loans
3
Introduction of home loan, 20-27
Meaning, H.D.F.C HOME
LOAN(Current rate), Advantages
of home loan,Disadvantages of
home loan
4
Meaning of payday loan, 28-35
Advantages and Disadvantages,
5
Non performing asset, Types, 36 -40
secured and unsecured loans
6 Two wheeler loan,loan 41-44
modification,
7 case study 45-52
8
Conclusion 53-54
9
Annexure 55
BIBLOGRAPHY

8. EXECUTIVE SUMMARY
AN OBJECTIVE APPROACH FOR ESTIMATING FAIR VALUES OF BANK LOANS
USING THE OBSERVABLE INFORMATION PROVIDED. BANK LOANS IS
IMPORTANT TO INVESTORS, CREDITORS,REGULATORS,AND OTHER INTERESTED
PARTIES.
MAIN OBJECTIVE IS HOW THE LOANS PLAY IMPORTANT ROLE
IN THE BANKS SECTOR AND HOW THIS LOAN IS USEFUL TO THE BANK AS WELL
AS CUSTOMERS.

9. MEANING
It easy facility where by a lumpsum amount
borrower,which is repayable after an agreed period short term,medium term & long
term loans are granted by the commercial banks for personal &commercial
purpose.they are generally sanctioned against a security.
Interest is charge by a banks on the total amount of the loan whether used or
not.loans that are granted for a period upto five years are called short term
loans,loans granted between 5 to7 years are called medium term loans and loans
granted for more than 7 years are called long term loan.
A loan is a kind of advance made by a bank to the customer with or without
security.it is given for a fixed period at an agreed rate of interest.the bank makes a
lump sum payment to the borrower or credits his deposit account with the amount
of advance.repayments are made in instalments or at the expiry of a certain
period.the loan may be a term loan or demand loan.the payment of term loan
repayable with in 1 to 5 years. The demand loan is payable on demand &it is for a
short period.Advances
The term ‘loan’ refers to the amount borrowed by one person from another. The
amount is in the nature of loan and refers to the sum paidto the borrower. Thus.
from the view point of borrower, it is‘borrowing’and from the view point of bank,
it is ‘lending’. Loan may be regarded as ‘credit’ granted where the money is
disbursed and its recovery is made on a later date. It is a debt for the borrower.
While granting loans, credit is given for a definite purpose and for a predetermined
period. Interest is charged on the loan at agreed rate and intervals of payment.
‘Advance’ on the other hand, is a ‘credit facility’ granted by the bank. Banks grant
advances largely for short-term purposes,such as purchase of goods traded in and
meeting other short-term trading liabilities. There is a sense of debt in loan,
whereas an advance is afacility being availed of by the borrower. However, like
loans,Advances are also to be repaid. Thus a credit facility- repayable in
instalments
over a period is termed as loan while a credit facility repayable
within one year may be known as advances. However, in the present lesson these
two terms are used interchangeably.Utility of Loans and Advances Loans and
advances granted by commercial banks are highly
and beneficia,individuals,firms,companies and industrns. Thegrowthrial conce and
diversification of business activities are effected to a large extent through bank
financing. Loans and advances granted by banks help in meeting short-term and
long term financial needs of business enterprises.We can discuss the role played by
bank a) Loans and advances can be arranged from banks in keeping with the
flexibility in business operations. Traders, may borrow money for day to day

10. financial needs availing of the facility of cash
credit, bank overdraft and discounting of bills. The amount raised as loan may be
repaid within a short period to suit the
convenience of the borrower. Thus business may be run efficiently with borrowed
funds from banks for financing its working capital
requirements.
(b) Loans and advances are utilized for making payment of
current liabilities, wage and salaries of employees, and also the tax liability of
business.
(c) Loans and advances from banks are found to be ‘economical’ for traders and
businessmen, because banks charge a reasonable rate of interest on such
loans/advances. For loans from money lenders, the rate of interest charged is very
high. The interest charged by commercial banks is regulated by the Reserve Bank
of India.
(d) Banks generally do not interfere with the use, management
and control of the borrowed money. But it takes care to ensure that the money lent
is used only for business purposes.
(e) Bank loans and advances are found to be convenient as far as its repayment is
concerned. This facilitates planning for future and timely repayment of loans.
Otherwise business activities would have come to a halt.
(f) Loans and advances by banks generally carry element of
secrecy

11. DEFINITION
Definition: Money borrowed that is usually repaid with interest
The most common type of loans come from banks, which exist to lend money, so
it's no surprise that banks offer a wide variety of ways to fund a business's growth.
Here's a look at how lenders generally structureloans, with some common
variations: A loan that a business owners gets from a bank
Although many business owners who need financing will automatically think to
turn to a bank for that funding, traditionally, the paperwork and processing costs
involved in making and servicing loans have made the small loans most
entrepreneurs seek too costly for big banks to administer. Put plainly, a loan under
$25,000--the type many startups are looking for--may not be worth a big bank's
time. A bank loan to a company, with a fixed maturity and often featuring
amortization of principal. If this loan is in the form of a line of credit, the funds are
drawn down shortly after the agreement is signed. Otherwise, the borrower usually
uses the funds from the loan soon after they become available. Bank term loans are
very a common kind of lending.

12. History of loan
In recent years, however, the relationship between banks and small businesses has
been improving as more and more banks realize the strength and importance of this
growing market. With corporations and real estate developers no longer spurring
so much of banks' business, lenders are looking to entrepreneurs to take up the
slack.
Many major banks have added special services and
programs for small businesses; others are streamlining their loan paperwork and
approval process to get loans to entrepreneurs faster. On the plus side, banks are
marketing to small businesses like never before. On the downside, the
"streamlining" process often means that, more than ever, loan approval is based
solely on numbers and scores on standardized rating systems rather than on an
entrepreneur's character or drive.

13. TYPES OF LOANS
Line-of-credit loans. The most useful type of loan for a small business is the
line-of-credit loan. This is a short-term loan that extends the cash available in your
business's checking account to the upper limit of the loan contract. You pay
interest on the actual amount advanced from the time it is advanced until it is paid
back. Line-of-credit loans are intended for purchases of inventory and payment of
operating costs for working capital and business cycle needs. They are not intended
for purchases of equipment or real estate.
Installment loans. These bank loans are paid back with equal monthly
payments covering both principal and interest. Installment loans may be written to
meet all types of business needs. You receive the full amount when the contract is
signed, and interest is calculated from that date to the final day of the loan. If you
repay an installment loan before its final date, there will be no penalty and an
appropriate adjustment of interest.
Balloon loans. These loans require only the interest to be paid off during
the life of the loan, with a final "balloon" payment of the principal due
on the last day. Balloon loans are often used in situations when a
business has to wait until a specific date before receiving payment from
a client for its product or services.
Interim loans. Interim financing is often used by contractors building
new facilities. When the building is finished, a mortgage on the property
will be used to pay off the interim loan.
Secured and unsecured loans. Loans can be secured or unsecured. An
unsecured loan has no collateral pledged as a secondary payment source should
you default on the loan. The lender provides you with an unsecured loan because it
considers you a low risk. A secured loan requires some kind of collateral but
generally has a lower interest rate than an unsecured loan. The collateral is usually
related to the purpose of the loan; for instance, if you are borrowing to buy a
printing press, the press itself will likely serve as collateral. Loans secured with
receivables are often used to finance growth, with the banker lending up to 75
percent of the amount due. Inventory used to secure a loan is usually valued at up
to 50 percent of its sale price.

14. Although the SBA doesn't actually loan money itself, it does provide loan
guarantees to entrepreneurs, promising the bank to pay back a certain percentage of
your loan if you're unable to. Banks participate in the SBA program as regular,
certified or preferred lenders. The most basic eligibility requirement for SBA loans
is the ability to repay the loan from cash flow, but the SBA also looks at personal
credit history, industry experience or other evidence of management ability,
collateral and owner's equity contributions. If you own 20 percent or more equity
in the business, the SBA asks that you personally guarantee the loan. After all, you
can't ask the government to back you if you're not willing to back yourself. Here's a
quick look at the numerous loan programs offered by the SBA for growing
businesses:
The 7(a) Loan Guaranty Program. This is the primary SBA loan
program. The SBA guarantees up to $750,000 or 75 percent of the total
loan amount, whichever is less. For loans of less than $100,000, the
guarantee usually tops out at 80 percent of the total loan. A 7(a) loan can
be used for many business purposes, including real estate, expansion,
equipment, working capital or inventory. The money can be paid back
over as many as 25 years for real estate and 10 years for working capital.
Interest rates are a maximum of 2.75 percent if over seven years.
The SBA LowDoc Program. This is a special 7(a) loan promising
quick processing for amounts less than $150,000. "LowDoc" stands for
"low documentation," and approval relies heavily on your personal
credit rating and your business's cash flow. LowDoc loan proceeds can
be used for many purposes. Applicants seeking less than $50,000 are
required to complete only a one-page SBA form. Those seeking $50,001
to $150,000 submit the same short form, plus supply copies of individual
income tax returns for the previous three years and financial statements
from all guarantors and co-owners. The SBA guarantees a 36-hour
turnaround on these loan requests.
The SBA Express Program. This is a close cousin of the LowDoc, also
offering loans of up to $150,000. However, SBA Express gets you an
answer more quickly because approved SBA Express lenders can use
their own documentation

15. and procedures to attach an SBA guarantee to an approved loan without
having to wait for SBA approval. The SBA guarantees up to 50 percent
of SBA Express loans.
CAPLine loans. These provide working capital through a selection of
revolving and nonrevolving lines of credit. CAPLine loans are
guaranteed by the SBA up to $750,000 or 75 percent of the total loan
amount, whichever is less. The CAPLine program includes variations for
seasonal businesses, companies that need credit to complete a large
contract, and builders and small companies that can't meet requirements
for other financing.
The SBA's Minority and Women's Pre-Qualification Loan
programs. These help women and minority entrepreneurs pre-qualify
for loans of up to $250,000. Private intermediary organizations chosen
by the SBA help eligible entrepreneurs complete a loan application.
With the SBA's guarantee attached, the bank is more likely to approve
the loan.
The Microloan program. This program helps entrepreneurs get very
small loans, from less than $100 to as much as $25,000. The loans can
be used for machinery and equipment, furniture and fixtures, inventory,
supplies and working capital, but not to pay existing debts. Microloans
are administered through nonprofit intermediaries using SBA funds.
Terms are usually short, and application turnaround time is less than a
week.
The CDC-504 Loan program. This program provides long-term, fixed-
rate loans of up to $1 million for financing fixed assets, such as land and
buildings. CDC-504 Loans are made through nonprofit Certified
Development Companies. The program is designed to enable small
businesses to create and retain jobs.
A type of loan available from banks, finance companies and other financial
institutions, generally for purposes such as buying a car, boat or furniture. Funds
are advanced (lent) to the customer for a fixed period, at a variable or fixed rate of
interest with repayments calculated at the outset on the basis of monthly
instalments. s in the business world by way of loans and advances as follows:

16. a) Loans and advances can be arranged from banks in keeping with the flexibility
in business operations. Traders, may borrow money for day to day financial needs
availing of the facility of cash credit, bank overdraft and discounting of bills. The
amount raised as loan may be repaid within a short period to suit the convenience
of the borrower. Thus business may be run efficiently with borrowed funds from
banks for financing its working capital requirements.
(b) Loans and advances are utilized for making payment ofcurrent liabilities, wage
and salaries of employees, and also the tax liability of business.
(c) Loans and advances from banks are found to be ‘economical’ for traders and
businessmen, because banks charge a reasonable rate of interest on such
loans/advances. For loans from money lenders,the rate of interest charged is very
high. The interest charged by commercial banks is regulated by the Reserve Bank
of India.
(d) Banks generally do not interfere with the use, management and control of the
borrowed money. But it takes care to ensure that the money lent is used only for
business purposes.
(e) Bank loans and advances are found to be convenient as far as its repayment is
concerned. This facilitates planning for future and timely repayment of
loans.Otherwise business activities would have come to a halt.

17. Regional banks benefit by avoiding loan trouble
Published: Sunday, June 27, 2010, 12:00 PM
Without attracting much notice, regional bank stocks are having a banner
year.They are up 28 percent through June 18, ranking among the best of the 154
industry groups in the Standard & Poor’s 500 Index. This hot performance was
achieved in a cool market: The S&P 500 as a whole is close to unchanged for the
year.Small and mid-sized banks tend to have fewer derivative-securities risks than
money-center banks do. Many of the regional banks avoided the stupidity of no-
documentation loans and the treacherous waters of subprime lending.The regional
banks I like now aren’t exactly household names. They include Bank of Hawaii in
Honolulu; First of Long Island in Glen Head, N.Y.; and Republic Bancorp in
Louisville, Ky.Should you consider investing in bank stocks even after they have
had a big move this year? In a word, yes. Financial stocks fell so hard in 2008 that
even after a substantial bounce in 2009 and 2010, many remain moderately
priced.The big question isn’t whether regional bank stocks are still cheap. Clearly,
many are. The real issue is whether the banks can restore their profits to a decent
level.Last week, I studied data for 238 publicly traded U.S. banks, using the
Bloomberg database. Profitability measures for most still looked feeble, even
though the Federal Reserve has been giving banks a hand by keeping short-term
interest rates unusually low.
Rich Spread
Banks make most of their profits by lending money at a higher rate than they pay
to borrow it. The spread, of course, is the banks’ life blood. By keeping rates low
for an extended period, the Fed is making sure banks don’t have to pay much to
borrow.
Banks I Like

18. Let’s examine a trio of regional banks that I like. None of them has fully
participated in this year’s bank-stock rally. Two of them have barely budged. I
think that is more a function of analyst neglect than lack of merit.Bank of Hawaii
mainly serves its home state, and has the benefits and drawbacks associated with
an economy dependent on tourism. The bank places lots of automated-teller
machines in McDonald’s restaurants, something I’m surprised we don’t see more
of here on the mainland.Through 2008, Bank of Hawaii showed earnings per share
increases eight years in a row. In 2009, earnings fell to $3 a share from $3.99 a
year earlier; analysts expect a rebound to about $3.28 this year. Non-performing
loans are 0.8 percent of all loans, putting the institution in the top 10th of all U.S.
banks in this regard.As a sweetener, it has a dividend yield of 3.7 percent.First of
Long Island has an even lower percentage of non-performing loans, at 0.5 percent.
The company marched through the recession with no downturn in earnings, and
analysts expect it to post record earnings of $2.30 a share this year, up 25 percent
from last year. The bank’s dividend yield is decent, at about 3 percent.Republic
Bancorp operates mainly in Kentucky, and also does business in Indiana, Ohio and
Florida. It has shown exceptional growth and profitability in the past, but has
drawn fire on overdraft charges.In 2009 the Federal Deposit Insurance Corp. issued
a cease-and-desist order telling the bank to stop charging what it said were
excessive rates on tax-refund loans.
Disclosure note: I have no long or short positions in the
stocks discussed here, personally or for clients.John
Dorfman, chairman of Thunderstorm Capital in Boston, is
a columnist for Bloomberg News. The opinions expressed
are his own. His firm or clients may own or trade
securities discussed in this column.

19. ADVANTAGES
competitive rates of interest and on mutually understood and accepted
repayment terms, as compared to unconventional lenders.
• Easy availability: Considering that lending institutions like banks must
always keep their depositors’ money working for them and earning more
money and interest than it pays out to depositors, bank loans should, in
theory, always be available to anyone seeking one.
• Good lending terms and relations with the bank: If a borrower meets the
bank’s lending criteria to the letter, he could benefit with a lower rate of
interest and relaxed and easy repayment terms. Add to this the bonus of
having a good working relationship with the bank.
• Speed: If the borrower has all the appropriate documentation, any bank
can process his application within an hour.
• Uses: A borrower can use a bank loan for a number of reasons—either for
setting up a business, or to buy home improvement goods or to go on a
holiday. In fact, a bank loan is a financial package which helps you tide over a
difficult time or set up business or invest in stocks. Considering it is a loan, it
means that eventually you will have to pay the bank back within a stipulated
time at a predetermined rate of interest.
• No need for collateral: For a personal loan, a borrower needn’t produce any
security or collateral. Besides, even the documentation is very little, as
compared to other kinds of loans, thereby expediting the processing time.
• No need to specify use of the money: In case of a personal loan, one need not
spell out what the money is going towards.
DISADVANTAGES
• Borrowers over-borrow: People sometimes over borrow money and get caught
in their own debt. Often, this can lead to a shortfall in cash flow and payments can
take precedence over income. To prevent this, loan repayments are restricted to a
set percentage of a borrower’s income.
• Prepayment penalty: Often, loans come with a prepayment penalty which
prevents the borrower from paying the loan earlier than the stipulated date without
incurring any extra costs.
• Restrictions: Banks levy a number of restrictions on the transaction. This

20. includes having a good credit history before applying for a loan, and there are often
restrictions about how the money should be used.
Finally, the pros of taking a bank loan far outweigh the cons. It’s best for an
investment since it offers a hedge against any financial problem as a result of
which you find you cannot pay back the bank. But if you have a solid investment,
you can easily pay back your loan

21. INTRODUCTION OF HOME LOANS
home is often their most valued ownership and banks have little fear that the
standard home buyer will be unsuccessful to make payments putting that
possession at risk. On these grounds, there are attractive secured loan options
offered to homeowners using their home as guarantee.

22. MEANING
A home is often the largest asset of a individual or couple. The financial
arrangement, or mortgage, planned to purchase the home are secured by the home
itself allowing lenders to offer very competitive interest rates. There are a wide
range of mortgage options, but mortgages are all similar in that they use the actual
property you’re purchasing as collateral.
Once you’re in possession of your home and you begin paying down the mortgage
and the value of the assets increases, your equity in the property increases. A
home equity loan allows you to borrow against this equity effectively creating a
second mortgage or lien on the home. The funds you’ve borrowed are secured by
the home meaning a default on your original mortgage or the home equity loan
gives the bank the option to foreclose in order to recover their loss. largest
secured home loan is the mortgage used to purchase the home initially or as part of
a refinance. There are a range of mortgage options including fixed and variable
rate loans, government assisted loans and interest only loans. But all of these home
loans are secured by the home itself. Very few people are in a position to pay cash
for a new property. While there is satisfaction in owning a property outright, there
are also benefits to leaving cash invested in other instruments and obtaining a
mortgage – even if you don’t technically need to.
In many areas, the interest paid on a home loan is a huge tax deduction. By
owning your home outright, you are not able to take advantage of this tremendous
tax savings. By taking out a loan for the purchase of your home, you’ll effectively
be paying more for the home over time, but you can counteract this by investing
the cash you might have used for the home purchase in an account or instrument
paying more interest than your mortgage.
If you arrange a mortgage for a new home with an interest rate of six percent, but
invest the cash in a combination of instruments paying an average of seven percent
over time, you’ll not only be earning a net profit of one percent on your
investments, you’ll

23. H.D.F.C HOME LOAN
Loans Features & Benefit
Loan - Home loans for individuals to purchase (fresh / resale) or construct
houses. Application can be made individually or jointly. HDFC finances up to 85%
maximum of the cost of the property (Agreement value + Stamp duty +
Registration charges) based on the repayment capacity of the customer.
Home Improvement Loan - HIL facilitates internal and external repairs and
other structural improvements like painting, waterproofing, plumbing and electric
works, tiling and flooring, grills and aluminium windows. HDFC finances up to
85% of the cost of renovation (100% for existing customers) subject to market
value of the property..
Home Extension Loan - HEL facilitates the extension of an existing dwelling
unit. All the terms are the same as applicable to Home Loan.
Land Purchase Loan - Be it land for a dream house, or just an investment for
the future, HDFC Land Purchase Loan is a convenient loan facility to purchase
land. HDFC finances up to 85% of the cost of the land (Conditions Apply).
Repayment of the loan can be done over a maximum period of 15 years

24. ADVANTAGES OF HOME LOANS.
When it’s time to buy a new home, VA loans offer those who qualify some of the
best advantages available on the mortgage market today. These specialized loans
for America’s veterans put homeownership within reach by offering low interest
rates, no money down options and more.
At MyVaRefinance.net, we are proud to specialize in VA home loans. We offer a
variety of solutions for our clients and offer the service and respect our veterans
deserve. MyVaRefinance.net was founded on the principles of The Golden Rule
and we take our promise to deliver the best in service seriously.
So, why should you consider VA home loans or a
VA refinance?
As a result of changes to the mortgage industry, options for a conventional loan
with $0 down have evaporated and VA loans are one of the only $0 down home
loan options still available.
You can also save money each month since you do not have to pay PMI. PMI is
private mortgage insurance and can cost hundreds of dollars per month. Plus, you
can even qualify for lower VA mortgage rates by using your VA benefits.
Some people believe a VA loan involves red tape and requires more work. We
specialize in VA loans and have streamlined the process to save you time and

25. money. This is why so many families take advantage of their VA benefits and get a
VA home loan instead of a conventional loan.
Monthly Payment - Save Big Every Month
Since the loan is backed by the government, banks do not require PMI (private
mortgage insurance), an added monthly expense required for conventional loans
where the borrower finances more than 80% of the home's value. Banks will also
offer a lower interest rate to a VA borrower (typically 0.5%-1.0% reduction vs
conventional). Interest rates are based on the banks’ capital risk should the loan go
into default, but because a VA loan is backed by the government the bank takes
less risk and is able to offer a lower interest rate to you. A lower rate combined
with no PMI can substantially lower your monthly payment as seen in the chart
below.
A Streamlined Process
Many people believe VA home loans may require more work on their part. While
that may be true if you work with a local broker, we specialize in VA loans and
have developed a streamlined process for you. This saves you time while also
cutting out the red tape so you can take advantage of your benefits and save money
today.
Qualification Standards - VA is More Lenient
The qualification standards for each loan type are very different. Once again,
because the loan is backed by the government, banks assume less risk and have
less stringent qualification standards for VA loans making them easier to obtain.
It is important to know the differences between the loan types and understand your
options. Please feel free to explore our website and see why VA mortgage rates are
among the best in the industry. When you’re ready to begin the process to obtain a
loan to finance your dreams, just fill out our 30-second request form. We consider
it an honor to help America’s veterans make their dreams come true.

26. Advantages and Disadvantages of US Payday Loans
In the last decade one of America’s most booming businesses
has been companies that specialize in offering payday loans. It is not
uncommon to see several different payday loans in nearly every city in the
US. Payday loans organizations offer short term loans that are to be paid back,
with interest, on the borrower’s next payday. While these types of loans can
come in handy if a person finds themselves in a financial bind, there are both
good and bad aspects of the loan process.
Advantages of Payday Loans
Payday loans can provide a person with instant cash if they have an
unexpected expense occur that cannot wait until their next pay date. If certain
expenses such as auto repair bills, unexpected medical needs, or possible
disconnection of utilities come up and a person finds they do not have the
funds to cover them, a payday loan can help them out of a tight financial spot.
Fortunately, these types of loans do not normally require a credit check and
can be obtained rather quickly. As long as the borrower has an active, open
checking account that does not have a negative balance, proof of regular,
recurring income, some proof of identification, and a few good personal
references, a payday loan can be easy to obtain. If they have all of these items
on hand when they go to the payday loan business, it is possible for a loan to
be completed within one hour or less.
Disadvantages of Payday Loans
While payday loans may seem like a great way to have easy money on hand in
a very short amount of time, there are some downfalls. Depending upon the
borrower’s paycheck frequency, they will be required to pay the loan back in
full within one week, two weeks, or one month. Not only will they be paying
back the amount that was borrowed, but there will also be a fee charged by the
payday loan business for processing the loan.
Unfortunately, this is where getting a payday loan can begin to get ugly. The
fees charged by the payday loan business can be rather large amounts. Most of
these businesses charge up to $17.50 for every $100 that is borrowed. For
example, if a borrower receives a $300 loan, they can expect to pay back an

27. average of $352.50 to buy back the check that was written to the payday loan
company. If the loan is not paid back by the end of the business day on the
prearranged due date, it will be sent to the borrower’s bank to be withdrawn
from their checking account.
Pros and Cons of Payday Loans Summary
If obtaining a payday loan is a one time occurance, that is paid back in full
with no problems on the borrower’s next pay date, it can be a helpful service.
However, the real problems begin when borrower’s find themselves agreeing
to pay back more than what is feasible for their budget. If most of the
borrower’s next paycheck will be spent paying back the payday loan, they
may have no choice but to get a second payday loan in order to have enough
funds to get by on until their next paycheck arrives. This is how the vicious
cycle begins and the borrower may end up repeating the loan process over and
over for several months or possibly even years.

28. What Is the Meaning of Nonperforming Loans?
A nonperforming loan seems simple enough to understand in theory but is subject
to various definitions. Generally speaking, a loan is nonperforming when it is not
making income for the lender. According to the "Financial Times," the point when
a loan is classified as nonperforming by a lender and when it becomes a bad debt
depends on local regulations
Types
1. According to an Internal Revenue Service (IRS) issue paper on accrued interest
on nonperforming loans, "Nonperforming loans are those loans which, as a
result of the inability of the borrower to meet the contractual terms of the loans,
are delinquent and are placed on a non-accrual basis." Non-accrual loans can
remain on a lender's books; the lender simply stops accruing interest income on
the loan. The IRS notes banks use three general (though not conclusive) criteria
to determine whether a loan is delinquent. A loan can be nonperforming when a
borrower is 30, 60, or 90 days delinquent in making a payment.
Considerations
2. Banks can also make a partial write-off, and the loan balance will be listed as
non-accrual. Another consideration of a nonperforming loan can be when a loan
is being renegotiated or restructured. In all of these instances, the loan is not
making interest income for the bank. The loan is not performing.
Effects
3. A nonperforming loan has different effects on different lenders. The IRS lists
bank guidance for determining when a note is nonperforming for interest
payment purposes and taxes owed. In a 1993 loan charge-off guidance letter
from the National Credit Union Administration (NCUA) to credit unions, the
NCUA gave charge-off requirements for credit unions. A complete charge-off
was required for a nonperforming loan more than six months past due when no
payment of at least 75 percent of the regular monthly installment had been
made in the previous 90 days.

29. Investors
4. The United States Financial Accounting Standards Board uses the term "credit
impairment" for distressed loans much more than the term "nonperforming
loan." A June 2010 FASB summary of a meeting concerning accounting for
financial instruments highlights the lack of a hard-and-fast timeline rule when a
loan is considered nonperforming. Most investors who met with FASB
representatives stated there should be a mandatory cutoff date when
nonperforming loans should stop accruing interest. The agreed-to date was 90
days past due. Even with this hard-and-fast recommendation, investors
requested the FASB investigate different deadline dates for certain financial
instruments.
Global Nonperformance
5. Outside the United States, nonperforming loan definitions also differ widely
from country to country. A 2010 study released by the European Bank for
Reconstruction and Development (EBRD) found NPL definitions so varied that
EBRD researchers compared changes in NPL levels within individual
countries, rather than as a group. In the Ukraine, official NPL statistics rose
from 3.3 percent in June 2008 to June 2009. The report authors write that banks
have been rolling over nonperforming loans because of negative tax treatment
of write-downs, leaving the International Monetary Fund to estimate Ukranian
NPLs at 30 percent by the end of 2009

30. Unsecured loan
A loan to a company or individual who provides no collateral, so that the lender is
entirely dependent on the borrower's capacity and willingness to repay. In the event
of a default, the lender has a claim on the borrower's assets but has to go through a
legal process to exercise
Unsecured loans are small amounts borrowed from unorganised instituion.
Exapmle: Money borrowed from any person or a relative where you can get the
money without any security.
. Definition
An arrangement in which a lender gives money or property to a borrower, and the
borrower agrees to return the property or repay the money, usually along with
interest, at some future point(s) in time. Usually, there is a predetermined time for
repaying a loan, and generally the lender has to bear the risk that the borrower may
not repay a loan (though modern capital markets have developed many ways of
managing this risk).
l point out the nature of security provided for loans; and
l outline the procedure for grant of cash credit, overdraft and
discounting of bills of exchange.
Definition of Unsecured Loans
By Reagan Elizabeth Doran, eHow Contributor
Loans make up an enormous portion of the financial industry and the
economy in general. A loan provides funds to purchase something that
cannot be afforded at the time. It is a contract that promises one party will
repay the other party. In nearly all cases, interest is also added to a loan.
There are basically two loan categories: secured and unsecured. In both
secured and unsecured loans, money is borrowed and interest is paidLoans
make up an enormous portion of the financial industry and the economy in
general.

31. Secured Loans
1. In a secured loan, the loan is given with the stipulation that an asset could be
siezed and sold if the loan is not paid. The asset is used as collateral for the
loan. requent items used as collateral are houses, land, cars and jewelry. A
common type of secured loan is a mortgage. If the mortgage is not paid, the
house can be repossessed by the bank. The bank can then sell it.
Unsecured Loans
2. According to Investopedia, an unsecured loan " is issued and supported only by
the borrower's creditworthiness, rather than by some sort of collateral." Unlike
a secured loan, an unsecured loan does not require backing by assets. It is
usually based on the credit history of the borrower and the borrower's ability to
repay. A common type of unsecured loan is a credit card. Other types of
unsecured loans are personal loans, lines of credit and bank overdrafts.
Getting an Unsecured Loan
3. Getting an unsecured loan can be more difficult than getting a secured loan if
the borrower does not have an established or good credit rating. Although a
credit check is not always required, it most often is required to ensure that the
borrower has a history of paying off his debt. Depending on the type of
unsecured loan the borrower is looking for, it can be applied for either online or
in a financial institution.
Considerations
4. When applying for an unsecured loan, one should consider all aspects of the
debt. Interest rates and other fees should be examined closely and well
understood. The following are some questions that should be asked before
taking the loan: Can it be paid off easily in the future? What will the total cost
of the item be with interest if only the minimum payments can be made? How
long will it take to pay off this debt? How much do I need this item? Sometimes
it is better to save for an item than to assume more debt.

32. Warnings
5. Beware of predatory lending when apppying for an unsecured loan. While there
are many legitimate lenders, there are also those who take advantage of the
borrower. These lenders charge large fees or unfair high interest rates. Make
sure the lender is reputable and all the terms of the contract are read and
understood.
EDUCATION LOAN
Loan made for college or vocational training expenses, often at a Below Market Rate. Loans
backed by the Student Loan Marketing Association (Sallie Mae) are 90% guaranteed for
repayment of principal and interest. A guaranteed student loan (called a Stafford Student Loan,
after Sen. Robert T. Stafford of Vermont) is insured by a state guarantee agency and reinsured by
Sallie Mae. Repayment of a Stafford Student Loan is deferred until after college graduation.
An education loan is a loan taken to help pay for an education, usually at a college or trade
school, but may also be used to pay for private schools or prep schools as well. The education
loan is available in several different types.
These are student loans, parent loans and private loans. Loans are also either guaranteed or
unguaranteed. Student and parent loans are most likely to be guaranteed by the government,
though many agencies work for the government in this respect. Unguaranteed or unsubsidized
loans are usually from private lenders only, and usually can only be obtained if one has a good
credit score or significant equity
The student loan is usually the best choice education loan for a student whose parents cannot pay
for his or her education. While the student remains in school, interest on this type of education
loan accrues and is paid for by the government. When the student stops attending school, the
education loan is usually paid off in payments. These payments can be quite large if the loan is
large, so students should borrow only what they need.
A parent education loan is a good choice for parents who don’t want their children to end their
college career in debt. These can also be guaranteed, meaning that parents don’t necessarily have
to have great credit scores to get a loan. Unlike the student loan, parents usually begin payments
on this education loan right away. Interest rates tend to be relatively low, but a longer repayment
schedule means paying quite a bit of interest.
The private education loan almost always requires good credit. Many people use the equity in
their house to take out such a loan. Unlike the parent and student education loan, the private
education loan is not usually need based. Often when students apply for financial aid, they are
told they, or their parents, make too much money to qualify. In these cases, those who do not
have the money upfront to pay school costs may use equity to obtain loans.

33. The federal government does not guarantee the private education loan, and payments usually
begin on the loan right away. These loans usually have the highest interest rates, as well. If they
are taken as part of refinancing a home, they may be more economical. Some adults who work
and re-enter school also find themselves needing to take out a private education loan, since they
cannot qualify for any other type of loan. Most have to remain working, at least part time, in
order to make payments.
Because students frequently leave college heavily burdened with debt, it is important to consider
how much of a loan one really needs. The less debt contracted, the better. Before applying for an
education loan, evaluate the other types of aid that may be available. There are numerous
scholarships that go unclaimed each year because no one applies for them. Research into
scholarships that are not need-based can often help defer some college expenses, lessening the
amount one needs to borrow
A student loan is designed to help students pay for university tuition, books, and living
expenses. It differs from other types of loans in that the interest rate is substantially lower and the
repayment schedule is deferred while the student is still in education. Before accepting any kind
of student loan one should be familiar with its basic attributes.
loan made for college or vocational training expenses, often at a below market rate . Loans
backed by the student loan marketing association (Sallie Mae) are 90% guaranteed for repayment
of principal and interest. A guaranteed student loan (called a Stafford Student Loan, after Sen.
Robert T. Stafford of Vermont) is insured by a state guarantee agency and reinsured by Sallie
Mae. Repayment of a Stafford Student Loan is deferred until after college graduation.
UCO BANK'S ATTRACTIVE LOAN SCHEMES
Being a Commercial Bank, giving Loans and Advances is among our primary activities. Apart
from our participation in meeting both Term Loan and Working Capital requirements of
Agriculture sector, Trade and Service sector, Large/Medium and Small Scale Industries sector,
Infrastructure sector etc. including taking care of their Export/Import and non-fund based needs
like Letter of Credit, Bank Guarantee etc., we have a fairly large basket of loan products
specially designed to suit your personal needs. Salient features of some of the more attractive
Personal Loan Schemes are described below.

34. UCO Shelter
UCO Car
UCO Trader
Education Loan
UCO Cash
UCO Rent
UCO Mortgage
UCO Securities
UCO Real Estate
UCO Nari Shakti
UCO Shopper
UCO Pensioner
UCO Emd Loan
UCO Swabhiman –
Reverse Mortgage
Loan Scheme for
Senior Citizen
Interest Subsidy
Scheme for Housing
the Urban Poor
(ISHUP)
UCO SHELTER
This housing finance scheme brings to you an excellent opportunity to
have your own house or flat. The scheme has been carefully tailored to
suit your requirements and match your capacity. The reasonable rate of
interest that you pay will be calculated on reducing balance, i.e. you do
not have to pay interest on the loan installments actually repaid from the date of such repayment.
Eligibility

35. You are eligible for a loan under UCO SHELTER singly, or jointly as husband-wife/parent-
son/parent-daughter, if you are
Indian resident having regular source of income.
Minimum 21 years of age.
Maximum 65 years of age inclusive of repayment period
Singly or Jointly as Husband-Wife, Parent-Son & Parent-Daughter
Maximum 75 years of age for Senior Citizens availing finance to secure Shelter in Old
Age Home against full coverage by Bank’s own Term Deposit.
Purpose
Purchase of new independent house/ready built flat for residential purpose.
Construction of independent house on the site already owned by the applicant or site proposed to
be purchased from own sources.
Purchase of old house/flat not more than 30 years old, free from tenancy and constructed as per
approved plan.
Extension/Repair/Renovation of existing house/flat not more than 50 years old.
Takeover of home loans availed from other banks/FIs subject to certain terms.
Furnishing of house to be constructed/acquired with UCO Shelter Loan.
Loan for more than one purpose is allowed
UCO Shelter Loanee may be allowed to avail personal loan also under certain conditions.
Purchase of plot of land for housing purpose under certain conditions.
Quantum of loan
The quantum of loan will be decided as per loan entitlement subject to a maximum of 85% of the
total project cost of construction/purchase price of house/flat. Required margin of 15% may be
by way of cost of land.
Quantum of loan for furnishing will be 75% of cost of such furnishing subject to a ceiling of
20% of loan eligible for construction/acquisition of house/flat.

36. The area-specific maximum limits for construction/purchase are as under :
Rural Areas : Rs.25 Lac
Semi-urban/Urban/Metro Areas : Rs.100.00 Lac
Maximum limits for Repair/Extension/Renovation are Rs.7.50 lac in rural areas and
Rs.25.00 lac in Metro/Urban/Semi-Urban areas.
Purchase of Land – financing the cost of land in deserving cases upto 50% of cost of land
purchased from Urban Development Authorities/Govt. Bodies subject to the ceiling of 30% of
the project cost (i.e. Cost of land + Construction Cost).
Loan Entitlement
Within the above limits, loan entitlement will depend on the following income criteria:
Monthly income should be equal to/more than EMI + Rs.4,000/- in case of a family with up to
four members – Salaried/Non-salaried and agriculturist and bank’s own staff are entitled for loan
With increase in number of members, monthly income requirement goes up progressively by
Rs.1,000/- for each additional member. Income of spouse & major children may be considered
for enhancing the loan entitlement on their agreeing to stand as guarantor/ co-obligant
Loan limit can be enhanced if additional liquid security is offered.
Second Loan- Allowed for repair/renovation/extension of existing house after one year of first
loan with minimum margin requirement of 25%
Processing Fee
0.5% of the loan amount minimum Rs.1000.00. Only 0.25% payable on issuance of in-principle
sanction. Balance amount payable on final sanction.
No processing fees for take over loan.
Click here for rate of Interest :
Repayment
The maximum period of repayment is 25 years inclusive of moratorium. However, the monthly
interest charged during the moratorium period will have to be paid. The entire loan will have to
be adjusted before retirement or 65 years of age, whichever is earlier. Repayment may be made
by deduction from monthly salary or by means of post dated cheques. Flexibility in repayment is
permissible through stepped up EMIs and in case of farmer borrower, repayment is linked to

37. crop cycles. Both in case of Salaried and non salaried person, repayment period may be
enhanced to certain period over and above the prescribed period depending upon repaying
capacity of the co-applicant.
Prepayment charge
2% of the prepaid amount, if the loan is prepaid within 3 years. No prepayment charges
thereafter. However, no pre-payment charges are to levied if loan is pre-paid from own source.
Tax Benefits
Tax relief on principal and interest components of this loan would be available as per provisions
prevailing under Income Tax Act.
Insurance
Insurance cover on property under UCO Griha Raksha Yojna Scheme of NICL and personal
accident benefit to the borrower is available on death only to cover the outstanding balance under
UCO Griha Lakshmi Yojana Scheme (UCOGLYS). Group insurance cover to home loan
borrowers is available against any type of death from Rs.50000/- to Rs.100.00 lac under
UCOGLYS.
UCO CAR
This is an easy finance scheme for purchase of a new car as well as
second hand vehicle not older than 5 years and economic life of a vehicle
should be taken as 8 (eight) years from the date of manufacture of the vehicle.
Eligibility
Salaried Persons
The applicant must be a permanent employee having completed 2 years of service and remaining
period of service of more than 5 years. The minimum monthly take-home pay must be Rs.
7,500/- + EMI.
Professional & Businessmen
Minimum income should be Rs. 1.20 Lac per annum as per Income Tax Return/Assessment. LIC
Policy equal to the amount of loan should be assigned in favour of the Bank.
Quantum of loan

38. The amount of loan would be 85% of the cost of vehicle or Rs. 7.50 lacs whichever is lower in
case of purchase of new car. For purchase of old car, the maximum quantum would be 60% ( if
age of car is more than 4 years old ) and 70% ( if the age of car is upto 4 years old) of the cost of
the vehicle or Rs.3.50 lacs maximum. For second hand vehicle "certificate of fitness" and
valuation certificate is required.
1% service charge is applicable subject to a ceiling of Rs.1000/- only.
Repayment
The loan amount together with interest will have to be repaid within a maximum of 60 months.
In case where at source deduction is not possible, repayment should be made by post dated
cheques in 60 installments. In case of second hand/Pre-used vehicle the loan with interest should
be repaid within the residual economic life of the vehicle but not exceeding 36 installments.
0.5% charge is levied on pre-paid amount if loan limit is above Rs. 2 Lac
UCO TRADER
It is a loan for financing working capital and Term Loan needs of Retail and Wholesale trading
activities other than Export. Retail and Wholesale trade in various types of commodities (not
services) excluding those items which are specifically prohibited/restricted by the Bank, are
financed through this scheme. Fund based Advance is granted by way of Cash Credit against
stock as well as Book debt and Term Loan for acquisition of fixed assets to run the trade and
business.
Eligibility
Existing enterprises engaged in business for at least 2 years and earning profit during the last 2
years.
New trading unit started by existing UCO Trader borrowers or their close relatives/
allied/associate/connected concern under certain terms
New trading units as well as units which have not completed two years can be financed
maximum upto Rs.10 lac under certain terms
Quantum of loan
Minimum Rs. 1 Lac and Maximum Rs 200 Lac
Within fund based limit of Rs. 200 lac, term loan up to Rs. 25 lac can also be sanctioned for
acquisition of fixed assets. Repayment period of Term Loan not to exceed 60 months. Besides

39. the above quantum of fund based limit, NFB limit by way of Inland LC/Bank Guarantee if
needed, may be issued maximum up to 50% of FB working capital limit.
Salient features
Margin
• No margin is required for Cash Credit in case of existing units & 20/25% for new units
while computing drawing power
• Margin for Term Loan, LC & BG is 25%
• Application is simple; Balance Sheet is not required for limit up to Rs 10 lac and not
compulsory for limit below Rs 50 lac subject to certain conditions.
Security
• Primary-Hypothecation of stocks and book debt.
• Collateral-100% for Cash Credit (against stocks only ) and Term Loan, 125% for Cash
Credit(against stocks and debtors)
Processing Charges- 0.50% of fund based limit, 0.25% of Non-Fund based limit.
For more details please contact your nearest UCO Bank branch.
EDUCATION
LOAN
Scope:
The scheme extends a helping hand to meritorious students desirous of pursuing
basic/higher/professional/technical education either in India or abroad. The
parents will become co-borrowers with their dependant (student) if the latter
applies for educational loan.
Studies in India
School education including plus 2 stage.
Graduation courses leading to degrees like B.A., B.Sc., B.Com. etc.
Post Graduate courses leading to Masters degrees as also Ph.D.
Professional courses in Engineering, Medical, Agriculture, Veterinary, Law, Dental,
Management, Computer, etc.

40. Computer Certificate courses of reputed institutes accredited to Universities or DoE.
Courses like ICWA, CA, CFA, etc.
Studies Abroad
Graduation : Job oriented professional / technical courses offered by reputed Universities.
Post Graduation : MCA, MBA, MS, etc.
Courses conducted by CIMA – London, CPA in U.S.A., etc.
Eligibility
Applicant must have secured admission to professional/technical course through Entrance
Test/Selection Process.
Secured admission to foreign University / Institution.
No maximum or minimum income is prescribed for parents/family.
Age limit :
18 to 25 years for graduation course – may be extended from 28-30 years for general and SC/ST
candidates respectively.
21 to 28 years for post-graduation course etc. – may be extended from 30 -33 years for general &
SC/ST candidates respectively.
Quantum of loan
Need based finance subject to repaying capacity of parents/students with following ceilings :
Studies in India : Maximum Rs. 10.00 Lac
Studies Abroad : Maximum Rs. 20.00 Lac.
The loan amount under the scheme would be for meeting the following expenses :
Course Fees
Hostel/Boarding Fees including caution deposit/building fund etc.
Books, Stationery & Equipment required for the course, including Computers.
Examination/Library/Laboratory fees.

41. Travel Expenses/Passage for studies abroad.
Security
Upto Rs.4.00 lacs – No security
Above Rs.4.00 lacs – Collateral securities by way of suitable 3rd party guarantee or tangible
security equivalent to loan amount.
Margin
Upto Rs. 4 Lac - Nil
Above Rs. 4 Lac Studies in India - 5%
Studies Abroad - 15%
Service Charge : There is no processing fee /no service charge
Interest Rates-
Click here to view the rate of Interest
Repayment
The loan will be repaid in 5-7 years after commencement of repayment. There will be
moratorium for repayment during "the course period +1 year or 6 months after getting job, which
ever is earlier".
1% interest concession may be provided, if the interest is serviced during moratorium period.
For more details, please contact your nearest UCO Bank branch.
For more details, please contact your nearest UCO Bank branch.
UCO CASH

42. This is a Personal Loan scheme to meet the domestic needs like marriage, medical, traveling and
other social obligations.
Eligibility
Permanent Employees or those who have completed 3 years of service. Minimum take-home pay
should be 40% of gross salary after all deductions including EMI against this loan. Regular
income may also be reckoned for eligible quantum.
Quantum of loan
90% of the proposed expenditure or Rs. 2 Lacs whichever is lower. Additional amount may be
sanctioned within the quantum ceiling to the existing eligible borrowers.
Security
Loan will be on clean basis with two guarantors – Spouse and other than Spouse having equal
income with that of the applicant.
Click here for Interest Rates
Repayment
The loan amount with interest is repayable in 48 EMIs through salary deduction of employee
borrower. But one year before retirement.
Service Charge : 1% (minimum Rs.500/-)
For more details, please contact your nearest UCO Bank branch.
UCO RENT
This is a loan against the security of future receivables i.e. assignment of
future rent receivable, for productive purposes e.g. augmenting earnings
like investing in securities, undertaking repairs & renovation of the
property, etc.
Eligibility

43. Owners i.e. lessors of houses/flats/godowns/warehouses etc. only are eligible under the scheme.
The owner may be an individual, a firm or a company. Properties belonging to cooperative
societies are not considered for sanction of loan under the scheme.
Quantum of loan
Maximum 80% of the total rent receivable during the unexpired period of lease less tax
deduction at source.
Minimum Rs. 1 Lac
Click here for Interest Rates
Repayment
The repayment period can be extended upto a maximum period of 84 months.
Processing fee
1. Fresh Sanctions : 1% of the sanctioned loan amount.
2. Review on run down Balance: Rs.225.00 per lac, Min.Rs.250.00, Max. Rs.56000.00
For more details please contact your nearest UCO Bank branch.
UCO MORTGAGE
Under the scheme credit facilities are considered upto 60% value of the property located in
metro/urban/semi-urban centers to meet financial needs of government employees, employees of
schools, colleges, PSU, reputed corporate business enterprises, professionals and businessmen
with regular source of income and filing IT return against mortgage of their immovable property
with clear Title.
Eligibility
• Maximum age limit of the borrower should be 65 years on the date of application.
• Loans can be sanctioned in the form of term loan or overdraft.
Quantum of loan
Maximum (Rs) Minimum (Rs)
50 Lac 2 Lac

44. Click here to view rate of Interest
Repayment
Facility
Term Loan Maximum 84 E.M.I.
Overdraft 15% reduction in the overdraft limit by
the end of each year so that advance is
completely liquidated by the end of 7th
year.
Interest should be serviced every
month.
Salient Features
Processing Fee 1% of loan amount
Prepayment Charges 1% of amount prepaid
• While determining repayment capacity, income of spouse can also be taken. In that case
loan should be in joint names.
• The condition of maintaining 40% of net take home is applicable to both Salaried and
non-salaried person. In case of non-salaried person, their annual Gross Income, as per IT
Returns, is to be divided by 12 to arrive at Monthly Gross Income. Like Salaried persons,
their NET monthly income after all deductions including monthly installment of
proposed Term Loan and/or monthly interest on Overdraft and proportionate principal
amount to the extent of 15% of the O.D. limit/balance should not be less than 40% of
their Gross monthly income.
• If credit facility is granted against building/flat/apartment, the same should not be more
than 30 years old.
For more details, please contact your nearest UCO Bank branch.
UCO SECURITIES

45. Under the scheme credit facilities are extended to borrowers against financial securities issued by
Central Govt./State Govt./RBI in the form of National Savings Certificates, Kisan Vikas Patra,
Govt. Securities and Relief Bonds. Loans are also sanctioned against Life Insurance Policies of
Life Insurance Corporation of India and bonds/debentures issued by specific Public Financial
Institutions.
Eligibility
• The securities should be in the name of the borrower or any one of the joint borrowers.
• The securities should be transferable and can be assigned/pledged in favour of the Bank.
Quantum of loan
It will be determined on the basis of discounted face value/maturity value/surrender value of the
transferable security at 13.50% (BPLR -1.00%).
Click here for rate of Interest
Repayment
Facility
Demand Loan Loans should be adjusted from
the maturity proceeds of
Overdraft
securities assigned/transferred
Cash Credit
For more details, please contact your nearest UCO Bank branch.
UCO REAL ESTATE
Under the scheme advances are extended to the Promoters/Developers of
real estate who should be well established and experienced in their line of
activities at least for a period of three years. Cooperative Societies are not
eligible to be borrowers under the Scheme.
Eligibility

46. Only builders of repute, integrity and excellent track record and professionally managed are
eligible for such finance. They must have at least 3 years experience in the line and must have
successfully completed 2-3 projects. The financial position of the builders/developers as per last
audited balance sheet must be satisfactory. Financing would be subject to commercial viability
and sufficient cash generation to repay the loan.
Pre-requisites
a. Details of the project cost and means of finance
b. Profitability statement
c. Annual Cash Budget for the duration of the loan showing monthly/quarterly cash inflows of
the specific project along with repayment schedule
d. Audited financial statements for the last 3 years, the current year's estimate and projections for
next 3 years or till the completion of the project
e. Original Title Deed of the land, detailed estimate of the proposed construction from a
Chartered Engineer/Architect and permission from the competent authority of the property in
case it is falling under Urban Land Ceiling Act
f. Documents like non-encumbrance certificate, certified copy of R.S. Parcha, current,
renew/Municipal receipts, Lawyer's opinion on ownership and marketable title and sanctioned
plan.
g. The Bank should enter in to a legally vetted tripartite agreement with promoter and buyer that
should ensure among other covenants adherence to National Building Code (NBC).
Quantum of Loan
The quantum of advance will be assessed on the basis of peak level deficit projected in the Cash
Flow Statement in the Budget, as submitted by the borrower applicant.
Security:
(a) Primary: The land and building to be constructed on the land shall form the primary
security. The value of primary security should be adequate to cover the Bank finance.
(b) Collateral: Collateral in the form of equitable/registered mortgage of other land and building
of adequate value of promoter/ guarantor may be taken.
Margin- 25% (minimum)
Insurance-Building to be comprehensively insured against fire, riot and other damages with
Bank's clause.

47. Click here for Interest Rates
Processing & Up-Front Fees
a. Processing fees
1. Fresh Sanctions : 0.80% on the amount of loan applied for along with the application.
1.20% processing fee of
the sanctioned loan amount.
2. Review of TL on run down Balance : Rs.125.00 per lac, Min. Rs.250.00, Max.
Rs.56000.00
3. Renewal of CC/WC : Rs.395.00 per lac or part thereof Min.Rs.700.00
b. Upfront fee will be 1% of loan amount sanctioned
Delivery of Credit
The credit /quasi credit requirement of the Construction company by way of cash
credit/overdraft/short term loans linked to each specific project for a maximum period covering
the period of construction plus 12 months will be considered on merit. Bid bond, Bank
Guarantee for raising mobilization of advance, performance guarantee and guarantee for release
of retention money etc. will also be considered on merit. Disbursement will be in phases
depending upon the progress of work as certified by Chartered Engineer/Architects.
Repayment
Repayment is to be made in one or two installments after completion of the project and sale of
the flats. Sales realizations in one Project should not be diverted to another Project.
For more details, please contact your nearest UCO Bank branch.
UCO NARI SHAKTI
This Scheme is aimed at providing financial assistance to salaried women,
in line with the broad objective of the Government towards women's
empowerment.
Salient features
Eligibility

48. Applicant should be either a permanent employee or have completed 3 years of service.
Minimum take-home pay should be 40% of gross salary after all deductions including EMI
against this loan. Regular income other than Salary Income may also be reckoned for considering
the eligible amount.
Quantum of loan
90% of the proposed expenditure or Rs. 2 Lac whichever is lower. Additional loan amount may
be allowed within the quantum ceiling to the existing borrower for the purpose the earlier loan
was sanctioned.
Security:
Loan will be on clean basis with two guarantors including that of Spouse/Nominee of
PF/Gratuity. One guarantor other than spouse may be waived if additional liquid security is
provided up to 40% of the loan amount.
Click here to view rate of Interest :
Repayment
The loan amount with interest is repayable in 60 EMIs but one year before retirement
Service Charge - 1% (Min. Rs.500/-)
For more details, please contact your nearest UCO Bank branch.
UCO SHOPPER
It is a Consumer Loan scheme for Salaried Persons, Professionals and
Businessmen for purchase of a whole range of consumer durables and
two-wheelers. Consumer durables like TV, Computer, Refrigerator, Air-conditioner or any other
item acceptable to the Bank, and Two-wheelers can be purchased through this scheme.
Eligibility
Salaried Persons

49. Persons permanently employed in Govt./Semi-Govt. or reputed private concerns with remaining
period of service of more than 5 years with annual take-home pay not less than Rs. 36,000/-.
Income of spouse can also be reckoned to arrive at the stipulated take-home pay.
Professionals & Businessmen
The earnings of the applicant should not be less than Rs. 1 lac per annum as per Income Tax
Returns/Certificate. LIC policy is to be assigned in favour of the bank for an amount equal/or
more than the loan amount in case of non-salaried person.
Quantum of loan
• Maximum : Rs. 1,00,000/-
• Minimum : Rs. 10,000/-
• (Subject to maximum 10 times of monthly take-home pay in case of salaried persons).
Margin
In case of two wheelers minimum margin is 10% and for consumer durables the minimum
margin is 15%.
Service Charge
2% service charge subject to a maximum of Rs. 500.00 will be taken at the time of sanction.
Guarantee
Personal guarantee of a person acceptable to the Bank is required.
Repayment
The Loan is repayable together with interest within a maximum period of 60 months in equated
monthly installments either through salary deduction or through post-dated cheques. No charge
is levied for pre-payment.
For more details, please contact your nearest UCO Bank branch.
UCO PENSIONER

50. Short Term loan is extended through this scheme to Pensioners who receive pension through our
Branches. War widows drawing family Pension are also eligible.
Purpose
• For meeting medical expenses for self and dependants.
• Payment of mediclaim premium.
• Meeting marriage expenses.
• Educational and traveling expenses.
• Repairs/renovation of dwelling house.
• Funeral expenses.
Quantum of loan
Depends upon the monthly pension: 10 times of monthly pension or Rs. 1 lac whichever is
lower.
There is no processing charge or service charge.
Rate of Interest
Repayment
Repayable within 12 to 24 months. It can be extended to 36 months in genuine cases but not
beyond the period of 70 years age inclusive of repayment period. No pre-payment charge is
levied.
UCO EARNEST MONEY DEPOSIT LOAN SCHEME
Loan scheme for financing for Earnest Money Deposit for booking housing plots/flats offered by
various Urban/Metropolitan Development Authorities & Housing Boards.
Eligibility
Indian residents having regular documented source of income. Minimum 21 years of age Singly/
Jointly as permitted by State Housing Boards/Urban Development Authority/Metropolitan
Development Authority. The facility is to be allowed to only those applicants who fulfill all the
eligibility criteria under UCO Shelter Scheme.
Amount of Loan
Maximum not to exceed 80% of the EMD.

51. Processing Charge
Rs. 300.00 upfront per application
Margin - 20%
Interest Rates - 9.00% (Fixed)
Prerequisites-
• Letter of undertaking to be obtained from SHB/UDA/MDA of having noted Bank's lien
and refund the amount through UCO Bank in case of unsuccessful applicants
• In case of allotment of plot, housing loan under UCO Shelter can be availed by the
applicants. In such case the loan for EMD shall be adjusted against the loan granted for
purchase of land and construction of house thereon.
Repayment- 24 monthly installment
UCO SWABHIMAN - REVERSE MORTGAGE LOAN MORTGAGE LOAN
SCHEME FOR SENIOR CITIZEN
Bank introduces UCO Reverse Mortgage Loan Scheme for Senior Citizens, under Reverse
Mortgage a Senior Citizen, owning a house/flat, can avail of a monthly stream of Income against
the mortgage of his/her property while remaining the owner and occupying the house throughout
his/her lifetime, without repayment or servicing of the loan.
Eligible Borrowers Senior Citizens of India.
Purpose Supplementing Senior Citizen’s Income
Loan Amount Based on valuation of the property and age of the borrower
– Maximum Rs.50 lacs
Period of Loan Minimum 5 years and maximum 15 years.
Mode of Disbursement Monthly/Quarterly with fixed/increasing Equated monthly
Disbursement with an option to avail One-time lump sum
payment after 12 months from the first disbursement
during entire tenure of 15 years as per choice of the
borrower.
Security Equitable Mortgage of the residential property owned &
self occupied by the Senior Citizen borrower.
Rate of Interest 10.50% (fixed) with reset clause after 3 years.

52. Repayment The outstanding loan will be due when the last borrower
dies/permanently moves out of the house/would like to sell
the home.
Loan will be liquidated by sale of property.
Option available with the legal heir(s) to repay the loan
and redeem, the house property.
Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)
'Affordable Housing for All' is an important policy agenda of the Government of India.
Accordingly The Cabinet Committee for Economic Affairs has approved an Interest Subsidy
Scheme for Housing the Urban Poor in order to ameliorate the living conditions of Economically
Weaker Section/LIG population in urban areas. Primary objective of the scheme is to provide
interest subsidy support.
Objective:
The key objective of the scheme is to enable Economically Weaker Sections (EWS) and Low
Income Group (LIG) households to avail affordable housing loans for purchase of
house/construction of new house.
Definition:
a) EWS- Economically Weaker Sections are those households having monthly income upto
Rs.3300/-
b) LIG- Low Income Groups are those households having monthly income between Rs.3301/- to
Rs. 7300/-
Target Group:
Individuals /NGOs for on lending to their group members. Preference will be given to SCs, STs,
Minorities, Person with disabilities and Women beneficiaries in accordance with their proportion
in the total population of city/urban agglomerate during the 2001 census.
Applicants planning to form cooperative group housing societies or organizations like
Employees Welfare Housing, Labour Housing, etc. should be given preference and whenever
possible construction of houses by such cooperatives by way of 1+3 storied buildings should be
promoted so that cost of land is shared among beneficiaries. However, this is not a mandatory

53. requirement. Both individuals as well as group Housing borrowers are equally eligible under the
scheme.
Target Borrower:
Identification of beneficiaries will be undertaken by Urban Local Bodies or Local Nodal
Agencies and they will assist the borrowers in paper works and procedure of bank loan. However
the borrower would be free to approach and negotiate a loan under the scheme directly with the
bank branch.
Preference:
Preference will be given to Scheduled Caste, Scheduled Tribe, Minorities, Person with
disabilities and Women beneficiaries in accordance with their proportion in the total population
of the city/urban agglomerate during the 2001 census
Stipulations:
The ultimate beneficiaries should not own a house in his/her name or in the name of his/her
spouse or any dependent child. But such beneficiaries should own land in his name in case of
application for construction of new house.
Area of operation:
Urban area. Zonal Offices will be advised to submit us a list of branches at urban area for
implementation of the scheme.
Nodal Agency:
NHB and HUDCO were selected by the Government of India to act as intermediary financial
institutions that would be responsible for administering the subsidy. Before implementation the
Bank has to sign a MOU with any of the two organizations. We have signed MOU with NHB.
Loan amount:
a) EWS- Maximum loan of Rs.1 lac ( Rs one Lac Only) for a house of at least 25 sq mts.
b) LIG- Maximum loan of Rs.1.60 lac( Rs one Lac sixty thousand Only) for a house of at least
40 sq mts. However subsidy will be available for loan upto Rs. 1 lac only.
Disbursement:
Disbursement will be made on a phased manner depending upon the progress of construction.
Branch will monitor the construction of the dwelling units financed under the scheme, including
the approvals for the building design, infrastructure facilities etc. as also the quality of the
construction and verify through site visits etc. the expenditure incurred upto different stages of

54. construction. In case of construction disbursement may be done by debiting the respective loan
account and crediting the savings bank account of the borrower. However in case of purchase of
a ready built house the payment should be made directly to the vendor by issuing Demand Draft/
Pay Order as the case may be by debiting the loan account of the borrower.
Rate of Interest:
Interest @8.50% p.a. for first 5 years with a provision to reset after 5 years from the date of
drawal of first installment for all loan under the scheme.
Sanctioning Authority:
All the loan applications under the scheme will be processed and sanctioned at the Retail
Processing Centres at Zonal Offices and in case there is no Retail Processing Centres at any
Zonal Office, at the branches identified by the respective Zonal Office. On receipt of the
sanctioned proposals the branch will disbursed the loan following all the stipulation noted by the
Retail Processing Centres at Zonal Office/Processing Cell.
However before sanctioning any loan it should be ensured that the borrower have sufficient
repaying capacity based on the average monthly income of the applicant for last three years and
monthly family expenditure depending upon the size of family.
Pre-payment charges:
There will be no pre-payment charges for any loan sanctioned under the scheme.
Subsidy:
The subsidy will be 5% p.a. on interest charged on the admissible loan amount for both EWS and
LIG, over the full period of the loan for construction or acquisition of a new house.
The Net Present Value (NPV) of the subsidy will be arrived at on the basis of notional discount
rate of 9% p.a. (equivalent to Government Security rate) for the period of the loan and on the
interest chargeable at the time the loan is contracted.
The subsidy will be credited upfront to the borrowers account and interest will be calculated on
the net amount of loan at the agreed rate of interest.
Procedure for claiming Subsidy:
Participating branches will claim interest subsidy for the entire period of any loan disbursed
during the quarter to Head Office, Priority Sector Department through their respective Zonal
Offices.

55. Branches should submit their claim within 3 days of close of a quarter to their respective Zonal
Offices and the Zonal Offices in turn will submit it to Head Office, Priority Sector Department
within 7 days of close of a quarter.
Repayment:
Loan will be repaid in 180 to 240 EMI depending upon the income of the borrower. However
branches may prefer for 20 years repayment, to get full benefits of Interest Subsidy and lower
EMI.
Equated Monthly Installments (EMI )

56. H.D.F.C TWO WHEELER LOANS
Super-Bike Finance scheme now available for Harley Davidson Motorcycles.
For more details of the scheme, SMS <TWL> to 5676712 or write to
tw.support@hdfcbank.com
Whichever the bike, our Two Wheeler loan is the answer. With quick approvals,
flexible payment options and easy repayment - we'll help you buy the bike you
desire

57. F
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58. Boesen case study shows eager banks, easy loans
When lenders fail to follow basic banking rules and procedures designed to protect
depositors and shareholders:
• A local businessman like the late Ed Boesen can use false stock brokerage
account statements to obtain a series of multimillion-dollar loans.
• Six local banks are left scrambling for ways to recoup more than $16 million
through lawsuits and claims against Boesen's estate.activities — and possible
missteps of local lenders — have spilled out in court records.
A trail of documents filed over the past two months in Polk County District Court,
as well as commercial credit records, starts with Boesen using fraudulent Smith
Barney brokerage statements as collateral for millions of dollars in loans and ends
with the Iowa banking superintendent acknowledging that banks failed to do due
diligence.
"It is safe to say that probably some of the procedures that these banks had in place
were either inadequate or probably weren't followed," banking Superintendent
Tom Gronstal told the Des Moines Sunday Register.
In addition, three other Iowans familiar with lending policies and procedures said
the six banks will have to explain their actions to regulators, who will then try to
determine whether the Boesen loans were isolated mistakes. Those banks: First
American Bank, Regions, Community State Bank, Great Western Bank, Meta-
Bank and First National Bank of Omaha.
"Whenever I find banks making bad loans, it is because they are violating their
own lending policies generally or violating what represents good lending policy,"
said University of Iowa finance professor Gerry Suchanek, who lectures on
commercial and investment banking policies and procedures. "It is not illegal, but
failure to do a credit review or to do appropriate credit follow-up is something that
I can't imagine a bank would do ... consistently."
The banks continuing to give Boesen loans he didn't qualify for reminds another
finance professor of the mindset that existed in recent years as national lenders
made home mortgage loans to poor credit risks - a scandal that has rocked U.S.
financial markets.
"It was a matter of poor documentation, poor fact-checking and fraud that was
committed on loans not caught by these institutions," said Thomas Root, an

59. associate professor at Drake University. "As we know, that has been one of the key
major contributors to the entire subprime lending scandal."
Finally, it appears, one bank spotted Boesen's fraudulent attempts to secure a loan
and blew the whistle on him.
Trail of loans based on fraudulent records
Gronstal, the banking superintendent, believes that in addition to the banks making
mistakes, they were also victims.
"They basically got conned," Gronstal said. "(Boesen) was a very believable
person and I think people trusted him, and apparently that trust wasn't warranted. It
is unfortunate, but that is what happens sometimes."
Officials for the six lenders declined to talk in specifics about their loans to
Boesen, citing the various legal actions against the estate. In addition, several of
bank officials also expressed concern that the public's confidence in banks is shaky
in the current economic climate, so they want to avoid creating even greater
uncertainty among depositors.
But lawsuits filed over the past three months tell the story:
• Boesen's borrowing scheme apparently began in November 2007 when First
American Bank of Fort Dodge loaned him $3.8 million. Boesen, a First American
loan customer since at least 2003, presented bank officials with a statement
showing substantial funds in a brokerage account at the Citigroup Global Market
offices in Des Moines, court records show. The Citigroup office is also known as a
branch office of Smith Barney, which provides brokerage, investment banking and
asset management services across the United States.
• Boesen repeated his scheme in late December when he borrowed an unknown
amount of money from First National Bank of Omaha. Officials for First National
have not filed a claim against Boesen's estate, but probate documents show the
lender has security interests in the assets of Boesen-owned businesses amounting
to $8.2 million - and another set of records lists Boesen's interest in a Smith Barney
account as collateral for the loan.
• Less than two months later, Boesen obtained $5 million from Community State
Bank's branch in Ankeny, which had loaned Boesen-owned companies money

60. beginning in 2006. A Uniform Commercial Code financing statement filed by
Community State Bank also lists a Smith Barney account as collateral.
• Boesen borrowed another $7 million in April and May from Regions Bank in
Urbandale and Great Western Bank in Clive using a series of Smith Barney
statements, each supposedly reflecting large holdings.
With each loan, lenders filed financing statements listing money in a Smith Barney
account as collateral or, in the case of a $3.5 million Regions Bank loan made in
April, all property and other investments "held by Smith Barney for or on behalf of
the debtors."
• On June 19, Boesen received a $1 million loan on a promissory note from
MetaBank in Urbandale - the final loan he apparently received using a fraudulent
statement - according to a recent probate claim filed by the bank. The bank's claim
says a Smith Barney account was used as collateral to secure the note.
To date, no court documents have been filed by representatives of Boesen's estate
or Boesen's relatives challenging the allegation that he used false documents to
obtain the loans from the six banks. In fact, lawyers for Boesen's widow, Maureen,
have claimed in court documents that her signature was forged on the endorsement
of a check from one lender.
Banks' strategy: Secure more Boesen business
Why would so many banks be so eager to loan Boesen big sums of cash?
Evidence from one bank's records and analysis from one expert point to a simple
reason: competition.
Holmes Foster, a former Iowa banking superintendent, said the Boesen name and
reputation likely made lenders much more amenable when they should have been
doing better research into his loan applications. Boesen's family floral business,
which he owned with his brothers, has been a successful company throughout the
years. And, until recently, Boesen seemed to be building a five-state financial
empire involving floral companies, printing, land development and commercial
building management and ownership.
"When someone like him steps into your bank, you are hopeful you can do a lot of
business with him," Foster said. "Banks are human and very competitive. They
looked at it as an opportunity that they shouldn't pass up and probably allowed
their standards to be relaxed a little."

61. In addition, he suggested that an explosion of banks in the Des Moines area
provided Boesen with a host of new lenders eager to do business.
"There are as many as 40 banks and bank branches in this area, when five years to
10 years ago there were 12 to 20 banks here," Foster said.
But the banks may have unwittingly been easy marks.
"There is an old saying about newcomer banks: 'The first guy in their door to
borrow has probably been refused by everyone else in town,' " Foster said.
The most public example of how a bank worked with Boesen on a loan is found in
court documents filed by Great Western Bank, which is seeking up to $3 million in
life insurance benefits owed to Boesen's widow, Maureen, as means of recovering
most of its $3.5 million in loans.
Among the documents are minutes from the bank's loan committee review of
Boesen applications. Those records show bank officials offered this justification
for granting the loan: "Continue to work on obtaining more of the customers (sic)
banking relationships."
Boesen had provided Great Western officials with a monthly statement on Smith
Barney letterhead showing he had more than $8 million in one account, court
records show.
Boesen apparently gave bank officials an e-mail address they could use to verify
the loan with James Willer, office manager at a local Smith Barney office. But the
e-mail address he provided was to an AOL account, not to an official Smith Barney
e-mail address.
In court, Great Western's lawyers have said that loan officer James Schulze
attempted to verify the account's existence and that Schulze twice called what he
believed was Willer's cell phone number, but was unable to reach him. He made
one telephone call to the Smith Barney office in Des Moines, but didn't reach
Willer.
In addition, the lawyers submitted as evidence a copy of an e-mail Schulze
received, purportedly from Willer, that confirmed the account and that it wasn't
pledged to any other loan. That reply came from an AOL account.

62. Regulators will review actions of the banks
Gronstal, the banking superintendent, said that he believes Boesen's family name
and reputation probably played a role in the banks giving loans without verifying
that the Smith Barney account was genuine.
"I think what happened was that they had a number of transactions with Mr.
Boesen that went off fine, and had them over a period of years," Gronstal said.
"And for whatever reason, the whole thing got out of control, so they were
presented with documents and other things that they thought were real and they
weren't."
But control is what banks are supposed to exert, particularly when lending money,
according to Root.
"The question to be asked is, what process did they follow beyond what it said on
the application?" Root said. "Because the bottom line should be trust but verify. No
matter how much business they have with him, no matter what his reputation was,
their job was to get the information and do the fact-checking."
Suchanek, the U of I professor, said bank regulators likely would use the
fraudulent loans to examine the adequacy of all six lenders' procedures and
policies.
"Bad loans always will catch up with you, either in the form of losses or in the
form of audits by regulators who will say that the bank is developing a low-quality
loan portfolio," he said.
At the same time, Suchanek said that any regulatory review of the banks or the
timing of those reviews is kept confidential to prevent bank customers from losing
confidence in the strength of a lending institution that otherwise has a strong
foundation.
Sometimes banks make mistakes but don't deserve to be considered weak,
Suchanek said.
"There is nothing in the law that says you have to have a good lending practice," he
said. "Good lending practices or good credit review policies are only things that
regulators can enforce."
Foster said that he expects all six banks duped in Boesen's scam to have more than
enough strength to withstand any losses. Gronstal said that while depositors'
money was used to make the loans, only the shareholders in the bank will lose out
if the money isn't recovered.

63. In June, the six banks reported total deposits ranging from $469 million to $86
billion, according to the Federal Deposit Insurance Corp.
"It will be up to the examiners to review what happened, and I am sure that they
will," Foster said, noting that officials from either the federal regulatory agency or
the state banking superintendent's office conduct examinations annually.
"They will use that loan problem to examine

64. LOAN MODIFICATION
Over the last three years, banks have failed at an increasingly alarming rate. This
year, more banks have failed in the first seven or eight months than in all of last
year. Recently, the failure of a behemoth bank named “Colonial BancGroup” out
of Alabama was shocking. The bank had tens of billions of dollars in assets,
including quite a few billion dollars in mortgages. These sorts of challenges scare
governments, banks, financial institutions and investors. The federal government
has had to battle this fear by implementing stimulus programs, loan modification
programs and other forms of aid to banks and consumers.
While the stimulus programs have come under fire, and people are protesting
federal debt, banks are benefiting from the loan modifications they have been
agreeing to. Loan modifications limit foreclosures by giving homeowners another
way to stay in their homes.
For example, OneWest Bank of Pasadena is the savings bank which was created
from the ashes of IndyMac Bancorp, a financial institution that collapsed under the
weight of its bad mortgages. IndyMac was one of the leading banks in the
subprime mortgage crisis. They even had a quite a few mortgages where the
income of the homeowner was not properly documented.
While some of the mortgages have had problems, loan modifications have gone a
long way to helping banks build a profit. The IndyMac situation is a semi-crisis, as
they had a run on the bank and had to shut their doors. However, between the loan
modification efforts of California loan modification attorneys and renewed
ownership, the new OneWest Bank of Pasadena actually posted a profit. This is a
long way from over however. OneWest had $137 million worth of foreclosed
homes on their books on June 30, which is up from $18 million on March 31.
However, without the loan modification efforts of qualified California loan
modification attorneys, there is no telling how much larger the $137 million
number would be.
It is reported that of the $6.6 billion in mortgages that OneWest has in its portfolio,
nearly $2 billion were delinquent and/or facing foreclosure. With such a
substantial number, the bank is desperately seeking ways to keep these people in
their homes. Unlike global banks such as JP Morgan and Citi, OneWest is regional
and cannot afford to simply write off billions of dollars in losses year after year.
They need the homeowners to find ways to keep current with their mortgage
payments, which absolutely includes loan modifications.

65. Legal Disclaimer
The information contained herein is provided for general information and
advertising purposes only and is not intended to convey a legal option nor legal
advice for any particular case or situation. Nothing in this article shall create an
attorney-client relationship. Nothing sent to this law office via e-mail shall
constitute an attorney-client relationship. Nothing contained in this article shall be
construed to be a guarantee or prediction of result. Prior results are provided for
general information purposes only and do not guaranty, warranty or predict a
similar outcome with respect to any future matter. Results achieved depend on
individual circumstances and not everyone will qualify or be successful in
restructuring their mortgage loan.
A California loan modification attorney can help any homeowner decide if a loan
modification is right for their situation. A loan modification is a way to lower your
monthly mortgage payments to an amount that is more affordable for the
homeowner, thus allowing him or her to stay in their home and avoid foreclosure.
Loan modifications have been around for quite a long time, but were not really
paid much attention to until recently.
If you are facing foreclosure, if your home value has faced a severe decrease in
value or if you are afraid of falling way behind on your payments, contact a
qualified California loan modification attorney today.