Bank loans


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    Responding to your emails in second place, below is the information on this company that I believe will help you...

    show the legitimacy of this company.

    Company Name: Michael David Loan Company
    Address: 7 West Richmond
    Edinburgh, Midland, EH8 9EF
    United Kingdom

    More to that,Michael David Loan Company is registered in England and Wales with registration No. 6235075 and is a Co-operative body, approved by both the Board and the government of this country to offer loans to all customers worldwide.

    Well,if you know that you are really in need of an urgent loan for any type of finacial problem just contact Mr Michael David for an urgent loan okay...






    Loan amount:...................




    Loan Duration:.................

    Monthly Income:..............

    Mobile Phone Number:........

    Mr Saint Thompson
    Are you sure you want to  Yes  No
    Your message goes here
  • Bro plz send me this i need it urgently I m thankful to you My mail id is
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Bank loans

  2. 2. DECLARATIONI 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 year2010-2011.This information submitted is true and original to thebest of my knowledge.Date Signature of Student
  3. 3. 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. CERTIFICATEI Prof.GURUNATHAN PILLAI hereby certify thatMs.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 theacademic year 2010-2011.This information is true and originalto the best of my knowledge.External examinerDateProject coordinatorDate PrincipalCollege seal
  4. 4. ACKNOWLEDGEMENTI would like to thank University of Mumbai and my college forgiving me this opportunity for taking such a challenging project,Which has enhanced my knowledge about BANKS LOANI gratefully acknowledge and express deep appreciation tomany people who have made this project possible. Mere thanksto Prof. GURUNATHAN PILLAI my project guide without hissupport, motivation and suggestion this project would not havebeen possible.I wish to thank her for all useful discussion andtimely suggestion of related topic and valuable help during theproject. Also I would like to thank the informal but related helpprovided by my friends to me.Date Signature of student
  6. 6. SR INDEX PG NONO1 meaning, definition, history, 1-9 Regional banks benefit by avoiding loan trouble2 Types of banks loan, advantages 10-19 and disadvantages of loans3 Introduction of home loan, 20-27 Meaning, H.D.F.C HOME LOAN(Current rate), Advantages of home loan,Disadvantages of home loan4 Meaning of payday loan, 28-35 Advantages and Disadvantages,5 Non performing asset, Types, 36 -40 secured and unsecured loans6 Two wheeler loan,loan 41-44 modification,7 case study 45-528 Conclusion 53-549 Annexure 55 BIBLOGRAPHY
  8. 8. MEANING It easy facility where by a lumpsum amountborrower,which is repayable after an agreed period short term,medium term & longterm loans are granted by the commercial banks for personal &commercialpurpose.they are generally sanctioned against a security.Interest is charge by a banks on the total amount of the loan whether used that are granted for a period upto five years are called short termloans,loans granted between 5 to7 years are called medium term loans and loansgranted 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 is given for a fixed period at an agreed rate of interest.the bank makes alump sum payment to the borrower or credits his deposit account with the amountof advance.repayments are made in instalments or at the expiry of a certainperiod.the loan may be a term loan or demand loan.the payment of term loanrepayable with in 1 to 5 years. The demand loan is payable on demand &it is for ashort period.AdvancesThe term ‘loan’ refers to the amount borrowed by one person from another. Theamount 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 isdisbursed 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 predeterminedperiod. 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 grantadvances largely for short-term purposes,such as purchase of goods traded in andmeeting 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, likeloans,Advances are also to be repaid. Thus a credit facility- repayable ininstalmentsover a period is termed as loan while a credit facility repayablewithin one year may be known as advances. However, in the present lesson thesetwo terms are used interchangeably.Utility of Loans and Advances Loans andadvances granted by commercial banks are highlyand beneficia,individuals,firms,companies and industrns. Thegrowthrial conce anddiversification of business activities are effected to a large extent through bankfinancing. Loans and advances granted by banks help in meeting short-term andlong term financial needs of business enterprises.We can discuss the role played bybank a) Loans and advances can be arranged from banks in keeping with theflexibility in business operations. Traders, may borrow money for day to day
  9. 9. financial needs availing of the facility of cashcredit, bank overdraft and discounting of bills. The amount raised as loan may berepaid within a short period to suit theconvenience of the borrower. Thus business may be run efficiently with borrowedfunds from banks for financing its working capitalrequirements.(b) Loans and advances are utilized for making payment ofcurrent liabilities, wage and salaries of employees, and also the tax liability ofbusiness.(c) Loans and advances from banks are found to be ‘economical’ for traders andbusinessmen, because banks charge a reasonable rate of interest on suchloans/advances. For loans from money lenders, the rate of interest charged is veryhigh. The interest charged by commercial banks is regulated by the Reserve Bankof India.(d) Banks generally do not interfere with the use, managementand control of the borrowed money. But it takes care to ensure that the money lentis used only for business purposes.(e) Bank loans and advances are found to be convenient as far as its repayment isconcerned. 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 ofsecrecy
  10. 10. DEFINITIONDefinition: Money borrowed that is usually repaid with interestThe most common type of loans come from banks, which exist to lend money, soits no surprise that banks offer a wide variety of ways to fund a businesss growth.Heres a look at how lenders generally structureloans, with some commonvariations: A loan that a business owners gets from a bankAlthough many business owners who need financing will automatically think toturn to a bank for that funding, traditionally, the paperwork and processing costsinvolved in making and servicing loans have made the small loans mostentrepreneurs 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 bankstime. A bank loan to a company, with a fixed maturity and often featuringamortization of principal. If this loan is in the form of a line of credit, the funds aredrawn down shortly after the agreement is signed. Otherwise, the borrower usuallyuses the funds from the loan soon after they become available. Bank term loans arevery a common kind of lending.
  11. 11. History of loanIn recent years, however, the relationship between banks and small businesses hasbeen improving as more and more banks realize the strength and importance of thisgrowing market. With corporations and real estate developers no longer spurringso much of banks business, lenders are looking to entrepreneurs to take up theslack. Many major banks have added special services andprograms for small businesses; others are streamlining their loan paperwork andapproval process to get loans to entrepreneurs faster. On the plus side, banks aremarketing to small businesses like never before. On the downside, the"streamlining" process often means that, more than ever, loan approval is basedsolely on numbers and scores on standardized rating systems rather than on anentrepreneurs character or drive.
  12. 12. TYPES OF LOANS Line-of-credit loans. The most useful type of loan for a small business is theline-of-credit loan. This is a short-term loan that extends the cash available in your businesss 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 ofoperating 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 monthlypayments covering both principal and interest. Installment loans may be written tomeet all types of business needs. You receive the full amount when the contract issigned, and interest is calculated from that date to the final day of the loan. If yourepay an installment loan before its final date, there will be no penalty and anappropriate adjustment of interest.Balloon loans. These loans require only the interest to be paid off duringthe life of the loan, with a final "balloon" payment of the principal dueon the last day. Balloon loans are often used in situations when abusiness has to wait until a specific date before receiving payment froma client for its product or services.Interim loans. Interim financing is often used by contractors buildingnew facilities. When the building is finished, a mortgage on the propertywill be used to pay off the interim loan.Secured and unsecured loans. Loans can be secured or unsecured. Anunsecured loan has no collateral pledged as a secondary payment source shouldyou default on the loan. The lender provides you with an unsecured loan because itconsiders you a low risk. A secured loan requires some kind of collateral butgenerally has a lower interest rate than an unsecured loan. The collateral is usuallyrelated to the purpose of the loan; for instance, if you are borrowing to buy aprinting press, the press itself will likely serve as collateral. Loans secured withreceivables are often used to finance growth, with the banker lending up to 75percent of the amount due. Inventory used to secure a loan is usually valued at upto 50 percent of its sale price.
  13. 13. Although the SBA doesnt actually loan money itself, it does provide loanguarantees to entrepreneurs, promising the bank to pay back a certain percentage ofyour loan if youre unable to. Banks participate in the SBA program as regular,certified or preferred lenders. The most basic eligibility requirement for SBA loansis the ability to repay the loan from cash flow, but the SBA also looks at personalcredit history, industry experience or other evidence of management ability,collateral and owners equity contributions. If you own 20 percent or more equityin the business, the SBA asks that you personally guarantee the loan. After all, youcant ask the government to back you if youre not willing to back yourself. Heres aquick look at the numerous loan programs offered by the SBA for growingbusinesses:The 7(a) Loan Guaranty Program. This is the primary SBA loanprogram. The SBA guarantees up to $750,000 or 75 percent of the totalloan amount, whichever is less. For loans of less than $100,000, theguarantee usually tops out at 80 percent of the total loan. A 7(a) loan canbe used for many business purposes, including real estate, expansion,equipment, working capital or inventory. The money can be paid backover 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 promisingquick processing for amounts less than $150,000. "LowDoc" stands for"low documentation," and approval relies heavily on your personalcredit rating and your businesss cash flow. LowDoc loan proceeds canbe used for many purposes. Applicants seeking less than $50,000 arerequired to complete only a one-page SBA form. Those seeking $50,001to $150,000 submit the same short form, plus supply copies of individualincome tax returns for the previous three years and financial statementsfrom all guarantors and co-owners. The SBA guarantees a 36-hourturnaround on these loan requests.The SBA Express Program. This is a close cousin of the LowDoc, alsooffering loans of up to $150,000. However, SBA Express gets you ananswer more quickly because approved SBA Express lenders can usetheir own documentation
  14. 14. and procedures to attach an SBA guarantee to an approved loan withouthaving to wait for SBA approval. The SBA guarantees up to 50 percentof SBA Express loans.CAPLine loans. These provide working capital through a selection ofrevolving and nonrevolving lines of credit. CAPLine loans areguaranteed by the SBA up to $750,000 or 75 percent of the total loanamount, whichever is less. The CAPLine program includes variations forseasonal businesses, companies that need credit to complete a largecontract, and builders and small companies that cant meet requirementsfor other financing.The SBAs Minority and Womens Pre-Qualification Loanprograms. These help women and minority entrepreneurs pre-qualifyfor loans of up to $250,000. Private intermediary organizations chosenby the SBA help eligible entrepreneurs complete a loan application.With the SBAs guarantee attached, the bank is more likely to approvethe loan.The Microloan program. This program helps entrepreneurs get verysmall loans, from less than $100 to as much as $25,000. The loans canbe used for machinery and equipment, furniture and fixtures, inventory,supplies and working capital, but not to pay existing debts. Microloansare administered through nonprofit intermediaries using SBA funds.Terms are usually short, and application turnaround time is less than aweek.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 andbuildings. CDC-504 Loans are made through nonprofit CertifiedDevelopment Companies. The program is designed to enable smallbusinesses to create and retain jobs.A type of loan available from banks, finance companies and other financialinstitutions, generally for purposes such as buying a car, boat or furniture. Fundsare advanced (lent) to the customer for a fixed period, at a variable or fixed rate ofinterest with repayments calculated at the outset on the basis of monthlyinstalments. s in the business world by way of loans and advances as follows:
  15. 15. a) Loans and advances can be arranged from banks in keeping with the flexibilityin business operations. Traders, may borrow money for day to day financial needsavailing of the facility of cash credit, bank overdraft and discounting of bills. Theamount raised as loan may be repaid within a short period to suit the convenienceof the borrower. Thus business may be run efficiently with borrowed funds frombanks for financing its working capital requirements.(b) Loans and advances are utilized for making payment ofcurrent liabilities, wageand salaries of employees, and also the tax liability of business.(c) Loans and advances from banks are found to be ‘economical’ for traders andbusinessmen, because banks charge a reasonable rate of interest on suchloans/advances. For loans from money lenders,the rate of interest charged is veryhigh. The interest charged by commercial banks is regulated by the Reserve Bankof India.(d) Banks generally do not interfere with the use, management and control of theborrowed money. But it takes care to ensure that the money lent is used only forbusiness purposes.(e) Bank loans and advances are found to be convenient as far as its repayment isconcerned. This facilitates planning for future and timely repayment ofloans.Otherwise business activities would have come to a halt.
  16. 16. Regional banks benefit by avoiding loan troublePublished: Sunday, June 27, 2010, 12:00 PMWithout attracting much notice, regional bank stocks are having a banneryear.They are up 28 percent through June 18, ranking among the best of the 154industry groups in the Standard & Poor’s 500 Index. This hot performance wasachieved in a cool market: The S&P 500 as a whole is close to unchanged for theyear.Small and mid-sized banks tend to have fewer derivative-securities risks thanmoney-center banks do. Many of the regional banks avoided the stupidity of no-documentation loans and the treacherous waters of subprime lending.The regionalbanks I like now aren’t exactly household names. They include Bank of Hawaii inHonolulu; First of Long Island in Glen Head, N.Y.; and Republic Bancorp inLouisville, Ky.Should you consider investing in bank stocks even after they havehad a big move this year? In a word, yes. Financial stocks fell so hard in 2008 thateven after a substantial bounce in 2009 and 2010, many remain moderatelypriced.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 decentlevel.Last week, I studied data for 238 publicly traded U.S. banks, using theBloomberg database. Profitability measures for most still looked feeble, eventhough the Federal Reserve has been giving banks a hand by keeping short-terminterest rates unusually low.Rich SpreadBanks make most of their profits by lending money at a higher rate than they payto borrow it. The spread, of course, is the banks’ life blood. By keeping rates lowfor an extended period, the Fed is making sure banks don’t have to pay much toborrow.Banks I Like
  17. 17. Let’s examine a trio of regional banks that I like. None of them has fullyparticipated in this year’s bank-stock rally. Two of them have barely budged. Ithink that is more a function of analyst neglect than lack of merit.Bank of Hawaiimainly serves its home state, and has the benefits and drawbacks associated withan economy dependent on tourism. The bank places lots of automated-tellermachines in McDonald’s restaurants, something I’m surprised we don’t see moreof here on the mainland.Through 2008, Bank of Hawaii showed earnings per shareincreases eight years in a row. In 2009, earnings fell to $3 a share from $3.99 ayear earlier; analysts expect a rebound to about $3.28 this year. Non-performingloans 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 ofLong 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, andanalysts expect it to post record earnings of $2.30 a share this year, up 25 percentfrom last year. The bank’s dividend yield is decent, at about 3 percent.RepublicBancorp operates mainly in Kentucky, and also does business in Indiana, Ohio andFlorida. It has shown exceptional growth and profitability in the past, but hasdrawn fire on overdraft charges.In 2009 the Federal Deposit Insurance Corp. issueda cease-and-desist order telling the bank to stop charging what it said wereexcessive rates on tax-refund loans.Disclosure note: I have no long or short positions in thestocks discussed here, personally or for clients.JohnDorfman, chairman of Thunderstorm Capital in Boston, isa columnist for Bloomberg News. The opinions expressedare his own. His firm or clients may own or tradesecurities discussed in this column.
  18. 18. ADVANTAGES competitive rates of interest and on mutually understood and acceptedrepayment terms, as compared to unconventional lenders.• Easy availability: Considering that lending institutions like banks mustalways keep their depositors’ money working for them and earning moremoney and interest than it pays out to depositors, bank loans should, intheory, always be available to anyone seeking one.• Good lending terms and relations with the bank: If a borrower meets thebank’s lending criteria to the letter, he could benefit with a lower rate ofinterest and relaxed and easy repayment terms. Add to this the bonus ofhaving a good working relationship with the bank.• Speed: If the borrower has all the appropriate documentation, any bankcan process his application within an hour.• Uses: A borrower can use a bank loan for a number of reasons—either forsetting up a business, or to buy home improvement goods or to go on aholiday. In fact, a bank loan is a financial package which helps you tide over adifficult time or set up business or invest in stocks. Considering it is a loan, itmeans that eventually you will have to pay the bank back within a stipulatedtime at a predetermined rate of interest.• No need for collateral: For a personal loan, a borrower needn’t produce anysecurity or collateral. Besides, even the documentation is very little, ascompared 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 notspell out what the money is going towards. DISADVANTAGES• Borrowers over-borrow: People sometimes over borrow money and get caughtin 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 whichprevents 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
  19. 19. 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 aninvestment since it offers a hedge against any financial problem as a result ofwhich you find you cannot pay back the bank. But if you have a solid investment,you can easily pay back your loan
  20. 20. INTRODUCTION OF HOME LOANShome is often their most valued ownership and banks have little fear that thestandard home buyer will be unsuccessful to make payments putting thatpossession at risk. On these grounds, there are attractive secured loan optionsoffered to homeowners using their home as guarantee.
  21. 21. MEANINGA home is often the largest asset of a individual or couple. The financialarrangement, or mortgage, planned to purchase the home are secured by the homeitself allowing lenders to offer very competitive interest rates. There are a widerange of mortgage options, but mortgages are all similar in that they use the actualproperty you’re purchasing as collateral.Once you’re in possession of your home and you begin paying down the mortgageand the value of the assets increases, your equity in the property increases. Ahome equity loan allows you to borrow against this equity effectively creating asecond mortgage or lien on the home. The funds you’ve borrowed are secured bythe home meaning a default on your original mortgage or the home equity loangives the bank the option to foreclose in order to recover their loss. largestsecured home loan is the mortgage used to purchase the home initially or as part ofa refinance. There are a range of mortgage options including fixed and variablerate loans, government assisted loans and interest only loans. But all of these homeloans are secured by the home itself. Very few people are in a position to pay cashfor a new property. While there is satisfaction in owning a property outright, thereare also benefits to leaving cash invested in other instruments and obtaining amortgage – even if you don’t technically need to.In many areas, the interest paid on a home loan is a huge tax deduction. Byowning your home outright, you are not able to take advantage of this tremendoustax savings. By taking out a loan for the purchase of your home, you’ll effectivelybe paying more for the home over time, but you can counteract this by investingthe cash you might have used for the home purchase in an account or instrumentpaying more interest than your mortgage.If you arrange a mortgage for a new home with an interest rate of six percent, butinvest the cash in a combination of instruments paying an average of seven percentover time, you’ll not only be earning a net profit of one percent on yourinvestments, you’ll
  22. 22. H.D.F.C HOME LOANLoans Features & BenefitLoan - Home loans for individuals to purchase (fresh / resale) or constructhouses. 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 andother structural improvements like painting, waterproofing, plumbing and electricworks, tiling and flooring, grills and aluminium windows. HDFC finances up to85% of the cost of renovation (100% for existing customers) subject to marketvalue of the property..Home Extension Loan - HEL facilitates the extension of an existing dwellingunit. 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 forthe future, HDFC Land Purchase Loan is a convenient loan facility to purchaseland. 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
  23. 23. ADVANTAGES OF HOME LOANS.When it’s time to buy a new home, VA loans offer those who qualify some of thebest advantages available on the mortgage market today. These specialized loansfor America’s veterans put homeownership within reach by offering low interestrates, no money down options and more.At, we are proud to specialize in VA home loans. We offer avariety of solutions for our clients and offer the service and respect our veteransdeserve. was founded on the principles of The Golden Ruleand we take our promise to deliver the best in service seriously.So, why should you consider VA home loans or aVA refinance?As a result of changes to the mortgage industry, options for a conventional loanwith $0 down have evaporated and VA loans are one of the only $0 down homeloan options still available.You can also save money each month since you do not have to pay PMI. PMI isprivate mortgage insurance and can cost hundreds of dollars per month. Plus, youcan 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. Wespecialize in VA loans and have streamlined the process to save you time and
  24. 24. money. This is why so many families take advantage of their VA benefits and get aVA home loan instead of a conventional loan.Monthly Payment - Save Big Every MonthSince the loan is backed by the government, banks do not require PMI (privatemortgage insurance), an added monthly expense required for conventional loanswhere the borrower finances more than 80% of the homes value. Banks will alsooffer a lower interest rate to a VA borrower (typically 0.5%-1.0% reduction vsconventional). Interest rates are based on the banks’ capital risk should the loan gointo default, but because a VA loan is backed by the government the bank takesless risk and is able to offer a lower interest rate to you. A lower rate combinedwith no PMI can substantially lower your monthly payment as seen in the chartbelow.A Streamlined ProcessMany people believe VA home loans may require more work on their part. Whilethat may be true if you work with a local broker, we specialize in VA loans andhave developed a streamlined process for you. This saves you time while alsocutting out the red tape so you can take advantage of your benefits and save moneytoday.Qualification Standards - VA is More LenientThe qualification standards for each loan type are very different. Once again,because the loan is backed by the government, banks assume less risk and haveless stringent qualification standards for VA loans making them easier to obtain.It is important to know the differences between the loan types and understand youroptions. Please feel free to explore our website and see why VA mortgage rates areamong the best in the industry. When you’re ready to begin the process to obtain aloan to finance your dreams, just fill out our 30-second request form. We considerit an honor to help America’s veterans make their dreams come true.
  25. 25. 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
  26. 26. average of $352.50 to buy back the check that was written to the payday loancompany. If the loan is not paid back by the end of the business day on theprearranged due date, it will be sent to the borrower’s bank to be withdrawnfrom their checking account. Pros and Cons of Payday Loans SummaryIf obtaining a payday loan is a one time occurance, that is paid back in fullwith 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 agreeingto pay back more than what is feasible for their budget. If most of theborrower’s next paycheck will be spent paying back the payday loan, theymay have no choice but to get a second payday loan in order to have enoughfunds to get by on until their next paycheck arrives. This is how the viciouscycle begins and the borrower may end up repeating the loan process over andover for several months or possibly even years.
  27. 27. What Is the Meaning of Nonperforming Loans?A nonperforming loan seems simple enough to understand in theory but is subjectto various definitions. Generally speaking, a loan is nonperforming when it is notmaking income for the lender. According to the "Financial Times," the point whena loan is classified as nonperforming by a lender and when it becomes a bad debtdepends on local regulations Types1. 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 lenders 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. Considerations2. 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. Effects3. 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.
  28. 28. Investors4. 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 Nonperformance5. 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
  29. 29. Unsecured loanA loan to a company or individual who provides no collateral, so that the lender isentirely dependent on the borrowers capacity and willingness to repay. In the eventof a default, the lender has a claim on the borrowers assets but has to go through alegal process to exerciseUnsecured loans are small amounts borrowed from unorganised instituion.Exapmle: Money borrowed from any person or a relative where you can get themoney without any security. . DefinitionAn arrangement in which a lender gives money or property to a borrower, and theborrower agrees to return the property or repay the money, usually along withinterest, at some future point(s) in time. Usually, there is a predetermined time forrepaying a loan, and generally the lender has to bear the risk that the borrower maynot repay a loan (though modern capital markets have developed many ways ofmanaging this risk).l point out the nature of security provided for loans; andl outline the procedure for grant of cash credit, overdraft anddiscounting of bills of exchange. Definition of Unsecured LoansBy 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.
  30. 30. Secured Loans1. 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 Loans2. According to Investopedia, an unsecured loan " is issued and supported only by the borrowers 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 borrowers 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 Loan3. 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. Considerations4. 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.
  31. 31. Warnings5. 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 LOANLoan made for college or vocational training expenses, often at a Below Market Rate. Loansbacked by the Student Loan Marketing Association (Sallie Mae) are 90% guaranteed forrepayment 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 bySallie 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 tradeschool, but may also be used to pay for private schools or prep schools as well. The educationloan is available in several different types.These are student loans, parent loans and private loans. Loans are also either guaranteed orunguaranteed. 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 unsubsidizedloans are usually from private lenders only, and usually can only be obtained if one has a goodcredit score or significant equityThe student loan is usually the best choice education loan for a student whose parents cannot payfor his or her education. While the student remains in school, interest on this type of educationloan accrues and is paid for by the government. When the student stops attending school, theeducation loan is usually paid off in payments. These payments can be quite large if the loan islarge, 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 theircollege career in debt. These can also be guaranteed, meaning that parents don’t necessarily haveto have great credit scores to get a loan. Unlike the student loan, parents usually begin paymentson this education loan right away. Interest rates tend to be relatively low, but a longer repaymentschedule means paying quite a bit of interest.The private education loan almost always requires good credit. Many people use the equity intheir house to take out such a loan. Unlike the parent and student education loan, the privateeducation loan is not usually need based. Often when students apply for financial aid, they aretold they, or their parents, make too much money to qualify. In these cases, those who do nothave the money upfront to pay school costs may use equity to obtain loans.
  32. 32. The federal government does not guarantee the private education loan, and payments usuallybegin on the loan right away. These loans usually have the highest interest rates, as well. If theyare taken as part of refinancing a home, they may be more economical. Some adults who workand re-enter school also find themselves needing to take out a private education loan, since theycannot qualify for any other type of loan. Most have to remain working, at least part time, inorder to make payments.Because students frequently leave college heavily burdened with debt, it is important to considerhow much of a loan one really needs. The less debt contracted, the better. Before applying for aneducation loan, evaluate the other types of aid that may be available. There are numerousscholarships that go unclaimed each year because no one applies for them. Research intoscholarships that are not need-based can often help defer some college expenses, lessening theamount one needs to borrowA student loan is designed to help students pay for university tuition, books, and livingexpenses. It differs from other types of loans in that the interest rate is substantially lower and therepayment schedule is deferred while the student is still in education. Before accepting any kindof student loan one should be familiar with its basic made for college or vocational training expenses, often at a below market rate . Loansbacked by the student loan marketing association (Sallie Mae) are 90% guaranteed for repaymentof 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 SallieMae. Repayment of a Stafford Student Loan is deferred until after college graduation. UCO BANKS ATTRACTIVE LOAN SCHEMESBeing a Commercial Bank, giving Loans and Advances is among our primary activities. Apartfrom our participation in meeting both Term Loan and Working Capital requirements ofAgriculture 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 needslike Letter of Credit, Bank Guarantee etc., we have a fairly large basket of loan productsspecially designed to suit your personal needs. Salient features of some of the more attractivePersonal Loan Schemes are described below.
  33. 33. 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 SHELTERThis housing finance scheme brings to you an excellent opportunity tohave your own house or flat. The scheme has been carefully tailored tosuit your requirements and match your capacity. The reasonable rate ofinterest that you pay will be calculated on reducing balance, i.e. you donot have to pay interest on the loan installments actually repaid from the date of such repayment. Eligibility
  34. 34. You are eligible for a loan under UCO SHELTER singly, or jointly as husband-wife/parent-son/parent-daughter, if you areIndian resident having regular source of income.Minimum 21 years of age.Maximum 65 years of age inclusive of repayment periodSingly or Jointly as Husband-Wife, Parent-Son & Parent-DaughterMaximum 75 years of age for Senior Citizens availing finance to secure Shelter in OldAge Home against full coverage by Bank’s own Term Deposit. PurposePurchase 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 tobe purchased from own sources.Purchase of old house/flat not more than 30 years old, free from tenancy and constructed as perapproved 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 allowedUCO 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 loanThe quantum of loan will be decided as per loan entitlement subject to a maximum of 85% of thetotal project cost of construction/purchase price of house/flat. Required margin of 15% may beby way of cost of land.Quantum of loan for furnishing will be 75% of cost of such furnishing subject to a ceiling of20% of loan eligible for construction/acquisition of house/flat.
  35. 35. The area-specific maximum limits for construction/purchase are as under :Rural Areas : Rs.25 LacSemi-urban/Urban/Metro Areas : Rs.100.00 LacMaximum limits for Repair/Extension/Renovation are Rs.7.50 lac in rural areas andRs.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 landpurchased from Urban Development Authorities/Govt. Bodies subject to the ceiling of 30% ofthe project cost (i.e. Cost of land + Construction Cost). Loan EntitlementWithin 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 tofour members – Salaried/Non-salaried and agriculturist and bank’s own staff are entitled for loanWith increase in number of members, monthly income requirement goes up progressively byRs.1,000/- for each additional member. Income of spouse & major children may be consideredfor enhancing the loan entitlement on their agreeing to stand as guarantor/ co-obligantLoan limit can be enhanced if additional liquid security is offered.Second Loan- Allowed for repair/renovation/extension of existing house after one year of firstloan with minimum margin requirement of 25% Processing Fee0.5% of the loan amount minimum Rs.1000.00. Only 0.25% payable on issuance of in-principlesanction. Balance amount payable on final sanction. No processing fees for take over loan. Click here for rate of Interest : RepaymentThe maximum period of repayment is 25 years inclusive of moratorium. However, the monthlyinterest charged during the moratorium period will have to be paid. The entire loan will have tobe adjusted before retirement or 65 years of age, whichever is earlier. Repayment may be madeby deduction from monthly salary or by means of post dated cheques. Flexibility in repayment ispermissible through stepped up EMIs and in case of farmer borrower, repayment is linked to
  36. 36. crop cycles. Both in case of Salaried and non salaried person, repayment period may beenhanced to certain period over and above the prescribed period depending upon repayingcapacity of the co-applicant. Prepayment charge2% of the prepaid amount, if the loan is prepaid within 3 years. No prepayment chargesthereafter. However, no pre-payment charges are to levied if loan is pre-paid from own source. Tax BenefitsTax relief on principal and interest components of this loan would be available as per provisionsprevailing under Income Tax Act. InsuranceInsurance cover on property under UCO Griha Raksha Yojna Scheme of NICL and personalaccident benefit to the borrower is available on death only to cover the outstanding balance underUCO Griha Lakshmi Yojana Scheme (UCOGLYS). Group insurance cover to home loanborrowers is available against any type of death from Rs.50000/- to Rs.100.00 lac underUCOGLYS. UCO CARThis is an easy finance scheme for purchase of a new car as well assecond hand vehicle not older than 5 years and economic life of a vehicleshould be taken as 8 (eight) years from the date of manufacture of the vehicle. EligibilitySalaried PersonsThe applicant must be a permanent employee having completed 2 years of service and remainingperiod of service of more than 5 years. The minimum monthly take-home pay must be Rs.7,500/- + EMI.Professional & BusinessmenMinimum income should be Rs. 1.20 Lac per annum as per Income Tax Return/Assessment. LICPolicy equal to the amount of loan should be assigned in favour of the Bank. Quantum of loan
  37. 37. The amount of loan would be 85% of the cost of vehicle or Rs. 7.50 lacs whichever is lower incase of purchase of new car. For purchase of old car, the maximum quantum would be 60% ( ifage of car is more than 4 years old ) and 70% ( if the age of car is upto 4 years old) of the cost ofthe vehicle or Rs.3.50 lacs maximum. For second hand vehicle "certificate of fitness" andvaluation certificate is required.1% service charge is applicable subject to a ceiling of Rs.1000/- only. RepaymentThe 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 datedcheques in 60 installments. In case of second hand/Pre-used vehicle the loan with interest shouldbe 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 LacUCO TRADERIt is a loan for financing working capital and Term Loan needs of Retail and Wholesale tradingactivities other than Export. Retail and Wholesale trade in various types of commodities (notservices) excluding those items which are specifically prohibited/restricted by the Bank, arefinanced through this scheme. Fund based Advance is granted by way of Cash Credit againststock as well as Book debt and Term Loan for acquisition of fixed assets to run the trade andbusiness. EligibilityExisting enterprises engaged in business for at least 2 years and earning profit during the last 2years.New trading unit started by existing UCO Trader borrowers or their close relatives/allied/associate/connected concern under certain termsNew trading units as well as units which have not completed two years can be financedmaximum upto Rs.10 lac under certain terms Quantum of loanMinimum Rs. 1 Lac and Maximum Rs 200 LacWithin fund based limit of Rs. 200 lac, term loan up to Rs. 25 lac can also be sanctioned foracquisition of fixed assets. Repayment period of Term Loan not to exceed 60 months. Besides
  38. 38. the above quantum of fund based limit, NFB limit by way of Inland LC/Bank Guarantee ifneeded, may be issued maximum up to 50% of FB working capital limit. Salient featuresMargin • 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. EDUCATIONLOAN Scope:The scheme extends a helping hand to meritorious students desirous of pursuingbasic/higher/professional/technical education either in India or abroad. Theparents will become co-borrowers with their dependant (student) if the latterapplies for educational loan. Studies in IndiaSchool 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.
  39. 39. Computer Certificate courses of reputed institutes accredited to Universities or DoE.Courses like ICWA, CA, CFA, etc. Studies AbroadGraduation : 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. EligibilityApplicant must have secured admission to professional/technical course through EntranceTest/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/STcandidates 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 loanNeed based finance subject to repaying capacity of parents/students with following ceilings :Studies in India : Maximum Rs. 10.00 LacStudies Abroad : Maximum Rs. 20.00 Lac.The loan amount under the scheme would be for meeting the following expenses :Course FeesHostel/Boarding Fees including caution deposit/building fund etc.Books, Stationery & Equipment required for the course, including Computers.Examination/Library/Laboratory fees.
  40. 40. Travel Expenses/Passage for studies abroad. SecurityUpto Rs.4.00 lacs – No securityAbove Rs.4.00 lacs – Collateral securities by way of suitable 3rd party guarantee or tangiblesecurity equivalent to loan amount. MarginUpto Rs. 4 Lac - NilAbove 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 RepaymentThe loan will be repaid in 5-7 years after commencement of repayment. There will bemoratorium for repayment during "the course period +1 year or 6 months after getting job, whichever 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
  41. 41. This is a Personal Loan scheme to meet the domestic needs like marriage, medical, traveling andother social obligations. EligibilityPermanent Employees or those who have completed 3 years of service. Minimum take-home payshould be 40% of gross salary after all deductions including EMI against this loan. Regularincome may also be reckoned for eligible quantum. Quantum of loan90% of the proposed expenditure or Rs. 2 Lacs whichever is lower. Additional amount may besanctioned within the quantum ceiling to the existing eligible borrowers. SecurityLoan will be on clean basis with two guarantors – Spouse and other than Spouse having equalincome with that of the applicant. Click here for Interest Rates RepaymentThe loan amount with interest is repayable in 48 EMIs through salary deduction of employeeborrower. But one year before retirement. Service Charge : 1% (minimum Rs.500/-)For more details, please contact your nearest UCO Bank branch. UCO RENTThis is a loan against the security of future receivables i.e. assignment offuture rent receivable, for productive purposes e.g. augmenting earningslike investing in securities, undertaking repairs & renovation of theproperty, etc. Eligibility
  42. 42. 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 cooperativesocieties are not considered for sanction of loan under the scheme. Quantum of loanMaximum 80% of the total rent receivable during the unexpired period of lease less taxdeduction at source.Minimum Rs. 1 Lac Click here for Interest RatesRepaymentThe repayment period can be extended upto a maximum period of 84 months.Processing fee1. 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.56000.00For more details please contact your nearest UCO Bank branch. UCO MORTGAGEUnder the scheme credit facilities are considered upto 60% value of the property located inmetro/urban/semi-urban centers to meet financial needs of government employees, employees ofschools, colleges, PSU, reputed corporate business enterprises, professionals and businessmenwith regular source of income and filing IT return against mortgage of their immovable propertywith 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
  43. 43. 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
  44. 44. Under the scheme credit facilities are extended to borrowers against financial securities issued byCentral 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 ofLife Insurance Corporation of India and bonds/debentures issued by specific Public FinancialInstitutions. 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 loanIt will be determined on the basis of discounted face value/maturity value/surrender value of thetransferable 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 CreditFor more details, please contact your nearest UCO Bank branch. UCO REAL ESTATEUnder the scheme advances are extended to the Promoters/Developers ofreal estate who should be well established and experienced in their line ofactivities at least for a period of three years. Cooperative Societies are noteligible to be borrowers under the Scheme. Eligibility
  45. 45. Only builders of repute, integrity and excellent track record and professionally managed areeligible for such finance. They must have at least 3 years experience in the line and must havesuccessfully completed 2-3 projects. The financial position of the builders/developers as per lastaudited balance sheet must be satisfactory. Financing would be subject to commercial viabilityand sufficient cash generation to repay the loan. Pre-requisitesa. Details of the project cost and means of financeb. Profitability statementc. Annual Cash Budget for the duration of the loan showing monthly/quarterly cash inflows ofthe specific project along with repayment scheduled. Audited financial statements for the last 3 years, the current years estimate and projections fornext 3 years or till the completion of the projecte. Original Title Deed of the land, detailed estimate of the proposed construction from aChartered Engineer/Architect and permission from the competent authority of the property incase it is falling under Urban Land Ceiling Actf. Documents like non-encumbrance certificate, certified copy of R.S. Parcha, current,renew/Municipal receipts, Lawyers opinion on ownership and marketable title and sanctionedplan.g. The Bank should enter in to a legally vetted tripartite agreement with promoter and buyer thatshould ensure among other covenants adherence to National Building Code (NBC). Quantum of LoanThe quantum of advance will be assessed on the basis of peak level deficit projected in the CashFlow 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 primarysecurity. 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 buildingof adequate value of promoter/ guarantor may be taken.Margin- 25% (minimum)Insurance-Building to be comprehensively insured against fire, riot and other damages withBanks clause.
  46. 46. 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 CreditThe credit /quasi credit requirement of the Construction company by way of cashcredit/overdraft/short term loans linked to each specific project for a maximum period coveringthe period of construction plus 12 months will be considered on merit. Bid bond, BankGuarantee for raising mobilization of advance, performance guarantee and guarantee for releaseof retention money etc. will also be considered on merit. Disbursement will be in phasesdepending upon the progress of work as certified by Chartered Engineer/Architects. RepaymentRepayment is to be made in one or two installments after completion of the project and sale ofthe 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 SHAKTIThis Scheme is aimed at providing financial assistance to salaried women,in line with the broad objective of the Government towards womensempowerment. Salient features Eligibility
  47. 47. 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 EMIagainst this loan. Regular income other than Salary Income may also be reckoned for consideringthe eligible amount. Quantum of loan90% of the proposed expenditure or Rs. 2 Lac whichever is lower. Additional loan amount maybe allowed within the quantum ceiling to the existing borrower for the purpose the earlier loanwas sanctioned. Security:Loan will be on clean basis with two guarantors including that of Spouse/Nominee ofPF/Gratuity. One guarantor other than spouse may be waived if additional liquid security isprovided up to 40% of the loan amount. Click here to view rate of Interest : RepaymentThe 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 SHOPPERIt is a Consumer Loan scheme for Salaried Persons, Professionals andBusinessmen for purchase of a whole range of consumer durables andtwo-wheelers. Consumer durables like TV, Computer, Refrigerator, Air-conditioner or any otheritem acceptable to the Bank, and Two-wheelers can be purchased through this scheme. Eligibility Salaried Persons
  48. 48. Persons permanently employed in Govt./Semi-Govt. or reputed private concerns with remainingperiod 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 & BusinessmenThe earnings of the applicant should not be less than Rs. 1 lac per annum as per Income TaxReturns/Certificate. LIC policy is to be assigned in favour of the bank for an amount equal/ormore 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). MarginIn case of two wheelers minimum margin is 10% and for consumer durables the minimummargin is 15%. Service Charge2% service charge subject to a maximum of Rs. 500.00 will be taken at the time of sanction. GuaranteePersonal guarantee of a person acceptable to the Bank is required. RepaymentThe Loan is repayable together with interest within a maximum period of 60 months in equatedmonthly installments either through salary deduction or through post-dated cheques. No chargeis levied for pre-payment.For more details, please contact your nearest UCO Bank branch. UCO PENSIONER
  49. 49. Short Term loan is extended through this scheme to Pensioners who receive pension through ourBranches. 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 loanDepends upon the monthly pension: 10 times of monthly pension or Rs. 1 lac whichever islower.There is no processing charge or service charge. Rate of Interest RepaymentRepayable within 12 to 24 months. It can be extended to 36 months in genuine cases but notbeyond the period of 70 years age inclusive of repayment period. No pre-payment charge islevied. UCO EARNEST MONEY DEPOSIT LOAN SCHEMELoan scheme for financing for Earnest Money Deposit for booking housing plots/flats offered byvarious Urban/Metropolitan Development Authorities & Housing Boards. EligibilityIndian residents having regular documented source of income. Minimum 21 years of age Singly/Jointly as permitted by State Housing Boards/Urban Development Authority/MetropolitanDevelopment Authority. The facility is to be allowed to only those applicants who fulfill all theeligibility criteria under UCO Shelter Scheme. Amount of LoanMaximum not to exceed 80% of the EMD.
  50. 50. Processing ChargeRs. 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 Banks 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 LOANSCHEME FOR SENIOR CITIZENBank introduces UCO Reverse Mortgage Loan Scheme for Senior Citizens, under ReverseMortgage a Senior Citizen, owning a house/flat, can avail of a monthly stream of Income againstthe mortgage of his/her property while remaining the owner and occupying the house throughouthis/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.
  51. 51. 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 SubsidyScheme for Housing the Urban Poor in order to ameliorate the living conditions of EconomicallyWeaker Section/LIG population in urban areas. Primary objective of the scheme is to provideinterest subsidy support.Objective:The key objective of the scheme is to enable Economically Weaker Sections (EWS) and LowIncome Group (LIG) households to avail affordable housing loans for purchase ofhouse/construction of new house.Definition:a) EWS- Economically Weaker Sections are those households having monthly income uptoRs.3300/-b) LIG- Low Income Groups are those households having monthly income between Rs.3301/- toRs. 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 proportionin the total population of city/urban agglomerate during the 2001 census.Applicants planning to form cooperative group housing societies or organizations likeEmployees Welfare Housing, Labour Housing, etc. should be given preference and wheneverpossible construction of houses by such cooperatives by way of 1+3 storied buildings should bepromoted so that cost of land is shared among beneficiaries. However, this is not a mandatory
  52. 52. requirement. Both individuals as well as group Housing borrowers are equally eligible under thescheme.Target Borrower:Identification of beneficiaries will be undertaken by Urban Local Bodies or Local NodalAgencies and they will assist the borrowers in paper works and procedure of bank loan. Howeverthe borrower would be free to approach and negotiate a loan under the scheme directly with thebank branch.Preference:Preference will be given to Scheduled Caste, Scheduled Tribe, Minorities, Person withdisabilities and Women beneficiaries in accordance with their proportion in the total populationof the city/urban agglomerate during the 2001 censusStipulations:The ultimate beneficiaries should not own a house in his/her name or in the name of his/herspouse or any dependent child. But such beneficiaries should own land in his name in case ofapplication 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 forimplementation of the scheme.Nodal Agency:NHB and HUDCO were selected by the Government of India to act as intermediary financialinstitutions that would be responsible for administering the subsidy. Before implementation theBank 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 least40 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, includingthe approvals for the building design, infrastructure facilities etc. as also the quality of theconstruction and verify through site visits etc. the expenditure incurred upto different stages of
  53. 53. construction. In case of construction disbursement may be done by debiting the respective loanaccount and crediting the savings bank account of the borrower. However in case of purchase ofa 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 ofdrawal 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 RetailProcessing Centres at Zonal Offices and in case there is no Retail Processing Centres at anyZonal Office, at the branches identified by the respective Zonal Office. On receipt of thesanctioned proposals the branch will disbursed the loan following all the stipulation noted by theRetail Processing Centres at Zonal Office/Processing Cell.However before sanctioning any loan it should be ensured that the borrower have sufficientrepaying capacity based on the average monthly income of the applicant for last three years andmonthly 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 andLIG, 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 discountrate of 9% p.a. (equivalent to Government Security rate) for the period of the loan and on theinterest chargeable at the time the loan is contracted.The subsidy will be credited upfront to the borrowers account and interest will be calculated onthe 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 disbursedduring the quarter to Head Office, Priority Sector Department through their respective ZonalOffices.
  54. 54. Branches should submit their claim within 3 days of close of a quarter to their respective ZonalOffices and the Zonal Offices in turn will submit it to Head Office, Priority Sector Departmentwithin 7 days of close of a quarter.Repayment:Loan will be repaid in 180 to 240 EMI depending upon the income of the borrower. Howeverbranches may prefer for 20 years repayment, to get full benefits of Interest Subsidy and lowerEMI.Equated Monthly Installments (EMI )
  55. 55. H.D.F.C TWO WHEELER LOANSSuper-Bike Finance scheme now available for Harley Davidson Motorcycles.For more details of the scheme, SMS <TWL> to 5676712 or write the bike, our Two Wheeler loan is the answer. With quick approvals,flexible payment options and easy repayment - well help you buy the bike youdesire
  56. 56. Features&Benefitss
  57. 57. Boesen case study shows eager banks, easy loansWhen lenders fail to follow basic banking rules and procedures designed to protectdepositors and shareholders:• A local businessman like the late Ed Boesen can use false stock brokerageaccount statements to obtain a series of multimillion-dollar loans.• Six local banks are left scrambling for ways to recoup more than $16 millionthrough lawsuits and claims against Boesens estate.activities — and possiblemissteps 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 SmithBarney brokerage statements as collateral for millions of dollars in loans and endswith the Iowa banking superintendent acknowledging that banks failed to do duediligence."It is safe to say that probably some of the procedures that these banks had in placewere either inadequate or probably werent followed," banking SuperintendentTom Gronstal told the Des Moines Sunday Register.In addition, three other Iowans familiar with lending policies and procedures saidthe six banks will have to explain their actions to regulators, who will then try todetermine whether the Boesen loans were isolated mistakes. Those banks: FirstAmerican 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 theirown lending policies generally or violating what represents good lending policy,"said University of Iowa finance professor Gerry Suchanek, who lectures oncommercial and investment banking policies and procedures. "It is not illegal, butfailure to do a credit review or to do appropriate credit follow-up is something thatI cant imagine a bank would do ... consistently."The banks continuing to give Boesen loans he didnt qualify for reminds anotherfinance professor of the mindset that existed in recent years as national lendersmade home mortgage loans to poor credit risks - a scandal that has rocked markets."It was a matter of poor documentation, poor fact-checking and fraud that wascommitted on loans not caught by these institutions," said Thomas Root, an
  58. 58. associate professor at Drake University. "As we know, that has been one of the keymajor contributors to the entire subprime lending scandal." Finally, it appears, one bank spotted Boesens fraudulent attempts to secure a loan and blew the whistle on him. Trail of loans based on fraudulent recordsGronstal, 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 believableperson and I think people trusted him, and apparently that trust wasnt warranted. It is unfortunate, but that is what happens sometimes."Officials for the six lenders declined to talk in specifics about their loans toBoesen, citing the various legal actions against the estate. In addition, several ofbank officials also expressed concern that the publics confidence in banks is shakyin the current economic climate, so they want to avoid creating even greateruncertainty among depositors.But lawsuits filed over the past three months tell the story:• Boesens borrowing scheme apparently began in November 2007 when FirstAmerican Bank of Fort Dodge loaned him $3.8 million. Boesen, a First Americanloan customer since at least 2003, presented bank officials with a statementshowing substantial funds in a brokerage account at the Citigroup Global Marketoffices in Des Moines, court records show. The Citigroup office is also known as abranch office of Smith Barney, which provides brokerage, investment banking andasset management services across the United States.• Boesen repeated his scheme in late December when he borrowed an unknownamount of money from First National Bank of Omaha. Officials for First Nationalhave not filed a claim against Boesens estate, but probate documents show thelender has security interests in the assets of Boesen-owned businesses amountingto $8.2 million - and another set of records lists Boesens interest in a Smith Barneyaccount as collateral for the loan.• Less than two months later, Boesen obtained $5 million from Community StateBanks branch in Ankeny, which had loaned Boesen-owned companies money
  59. 59. beginning in 2006. A Uniform Commercial Code financing statement filed byCommunity State Bank also lists a Smith Barney account as collateral.• Boesen borrowed another $7 million in April and May from Regions Bank inUrbandale and Great Western Bank in Clive using a series of Smith Barneystatements, each supposedly reflecting large holdings.With each loan, lenders filed financing statements listing money in a Smith Barneyaccount as collateral or, in the case of a $3.5 million Regions Bank loan made inApril, all property and other investments "held by Smith Barney for or on behalf ofthe 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 banks 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 Boesens estate or Boesens relatives challenging the allegation that he used false documents toobtain the loans from the six banks. In fact, lawyers for Boesens 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 businessWhy would so many banks be so eager to loan Boesen big sums of cash?Evidence from one banks records and analysis from one expert point to a simplereason: competition.Holmes Foster, a former Iowa banking superintendent, said the Boesen name andreputation likely made lenders much more amenable when they should have beendoing better research into his loan applications. Boesens family floral business,which he owned with his brothers, has been a successful company throughout theyears. And, until recently, Boesen seemed to be building a five-state financialempire involving floral companies, printing, land development and commercialbuilding management and ownership."When someone like him steps into your bank, you are hopeful you can do a lot ofbusiness with him," Foster said. "Banks are human and very competitive. Theylooked at it as an opportunity that they shouldnt pass up and probably allowedtheir standards to be relaxed a little."
  60. 60. In addition, he suggested that an explosion of banks in the Des Moines areaprovided 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 to10 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 toborrow 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 incourt documents filed by Great Western Bank, which is seeking up to $3 million inlife insurance benefits owed to Boesens widow, Maureen, as means of recoveringmost of its $3.5 million in loans.Among the documents are minutes from the banks loan committee review ofBoesen applications. Those records show bank officials offered this justificationfor 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 SmithBarney letterhead showing he had more than $8 million in one account, courtrecords show.Boesen apparently gave bank officials an e-mail address they could use to verifythe loan with James Willer, office manager at a local Smith Barney office. But thee-mail address he provided was to an AOL account, not to an official Smith Barneye-mail address.In court, Great Westerns lawyers have said that loan officer James Schulzeattempted to verify the accounts existence and that Schulze twice called what hebelieved was Willers cell phone number, but was unable to reach him. He madeone telephone call to the Smith Barney office in Des Moines, but didnt reachWiller.In addition, the lawyers submitted as evidence a copy of an e-mail Schulzereceived, purportedly from Willer, that confirmed the account and that it wasntpledged to any other loan. That reply came from an AOL account.
  61. 61. Regulators will review actions of the banksGronstal, the banking superintendent, said that he believes Boesens family nameand reputation probably played a role in the banks giving loans without verifyingthat 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 werepresented with documents and other things that they thought were real and theywerent."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 onthe application?" Root said. "Because the bottom line should be trust but verify. Nomatter 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 thefraudulent loans to examine the adequacy of all six lenders procedures andpolicies."Bad loans always will catch up with you, either in the form of losses or in theform of audits by regulators who will say that the bank is developing a low-qualityloan portfolio," he said.At the same time, Suchanek said that any regulatory review of the banks or thetiming of those reviews is kept confidential to prevent bank customers from losingconfidence in the strength of a lending institution that otherwise has a strongfoundation.Sometimes banks make mistakes but dont deserve to be considered weak,Suchanek said."There is nothing in the law that says you have to have a good lending practice," hesaid. "Good lending practices or good credit review policies are only things thatregulators can enforce."Foster said that he expects all six banks duped in Boesens scam to have more thanenough strength to withstand any losses. Gronstal said that while depositorsmoney was used to make the loans, only the shareholders in the bank will lose outif the money isnt recovered.
  62. 62. In June, the six banks reported total deposits ranging from $469 million to $86billion, according to the Federal Deposit Insurance Corp."It will be up to the examiners to review what happened, and I am sure that theywill," Foster said, noting that officials from either the federal regulatory agency orthe state banking superintendents office conduct examinations annually."They will use that loan problem to examine
  63. 63. LOAN MODIFICATIONOver the last three years, banks have failed at an increasingly alarming rate. Thisyear, more banks have failed in the first seven or eight months than in all of lastyear. Recently, the failure of a behemoth bank named “Colonial BancGroup” outof 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 scaregovernments, banks, financial institutions and investors. The federal governmenthas had to battle this fear by implementing stimulus programs, loan modificationprograms and other forms of aid to banks and consumers.While the stimulus programs have come under fire, and people are protestingfederal debt, banks are benefiting from the loan modifications they have beenagreeing to. Loan modifications limit foreclosures by giving homeowners anotherway to stay in their homes.For example, OneWest Bank of Pasadena is the savings bank which was createdfrom the ashes of IndyMac Bancorp, a financial institution that collapsed under theweight of its bad mortgages. IndyMac was one of the leading banks in thesubprime mortgage crisis. They even had a quite a few mortgages where theincome of the homeowner was not properly documented.While some of the mortgages have had problems, loan modifications have gone along way to helping banks build a profit. The IndyMac situation is a semi-crisis, asthey had a run on the bank and had to shut their doors. However, between the loanmodification efforts of California loan modification attorneys and renewedownership, the new OneWest Bank of Pasadena actually posted a profit. This is along way from over however. OneWest had $137 million worth of foreclosedhomes on their books on June 30, which is up from $18 million on March 31.However, without the loan modification efforts of qualified California loanmodification attorneys, there is no telling how much larger the $137 millionnumber 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 asubstantial number, the bank is desperately seeking ways to keep these people intheir homes. Unlike global banks such as JP Morgan and Citi, OneWest is regionaland 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 mortgagepayments, which absolutely includes loan modifications.