Investopedia

Continue to Site »

Character Loan

Filed Under » ,
Dictionary Says

Definition of 'Character Loan'

A character loan is a type of unsecured loan that is made on the basis of the borrower's reputation and credit. Borrowers are typically able to obtain only small loans by this method, since if the borrower is unable to repay the loan, the bank will most likely encounter considerable difficulty in recovering the loaned funds. This is in contrast to secured or collateralized loans under which repayment of the loan is secured by a valuable piece of property or equipment.
Investopedia Says

Investopedia explains 'Character Loan'

A common example of a character loan is a credit card. Before obtaining a credit card, the issuer checks the borrower's credit report (i.e. character), and determines how likely the borrower is to repay the loan. The issuer then decides on how large of a credit line (i.e. loan) it will allow. Borrowers with poor credit or no credit may be unable to obtain a credit card, or may be extended only a very small credit line.

Articles Of Interest

  1.

    Shuffle Away Your Debt With Balance Transfers

    This option can save you big bucks, but only if you watch out for rates and fees.

  2. Can't Get A Loan? Turn To Your Neighbor

    Peer-to-peer lending can be an inexpensive way to gain access to credit when banks are restricting lending.

  3. Lending From A Loan Officer's Perspective

    Learn how a loan officer thinks, so that you can get the best and safest loan.

  4. Personal Loans: To Lend Or Not To Lend?

    Attempting to help a loved one with a cash loan can put a strain on your relationship - and your bank account.

  5. Reduce Tuition With A Work-Incentive Program

    Find out how to gain valuable work experience and cut the cost of your education.

  6. What's On A Consumer Credit Report?

    A look at the various components and considerations that go into one's credit report and credit score.

  7. 7 Unconventional Ways Businesses Can Borrow Money

    Find out how your business can get the money it needs - even when the bank says "no".

  8. Taxable Rewards To Be Aware Of

    Find which benefits from reward programs count as income in the eyes of the IRS.

  9. Financial Solutions For Young Women

    Break through the stereotypes and find out how to manage your life to meet your needs.

  10. Bloated Budget? How To Trim The Fat

    Blood, sweat and tears should belong in the gym, but your money deserves some training time too.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  2. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  3. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  4. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  5. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  6. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
Trading Center