Investopedia

Continue to Site »

Legal Lending Limit

Filed Under » , ,
Dictionary Says

Definition of 'Legal Lending Limit'

The aggregate maximum dollar amount that a single bank can lend to a given borrower. The legal limits differ for different types of banks. The Financial Institutions Act of 1989 mandated that all savings and loan institutions must adhere to the same limits set forth for national banks.
Investopedia Says

Investopedia explains 'Legal Lending Limit'

The legal lending limit for national banks is 15% of combined capital and reserves on an unsecured loan and 25% for a loan that is fully collateralized. Bank holding companies can lend a bank affiliate either 10% of the capital plus the surplus of the affiliate, or else 20% of the capital of all affiliates, provided that they are all owned by the same holding company. Of course, most loans that would approach these limits are made to institutional borrowers only.

Articles Of Interest

  1.

    The Best Way To Borrow

    There are many avenues from which to drum up funding. Find out the pros and cons of each.

  2. Peer-To-Peer Lending Breaks Down Financial Borders

    Banks are no longer the only option for a loan - the P2P lending system operates without them.

  3. Subprime Lending: Helping Hand Or Underhanded?

    These loans can spell disaster for borrowers, but that doesn't mean they should be condemned.

  4. Subprime Is Often Subpar

    Proceed with caution when considering these short-term, high-interest mortgages.

  5. What is the difference between asset-based lending and asset financing?

    In the most common usage, the terms "asset-based lending" and "asset financing" refer to the same thing. Asset-based lending generally refers to a business using its assets as collateral for ...

  6. Making It Big On Wall Street

    Read about some of the most glamorous Wall Street jobs and what it takes to land one.

  7. Should You Add A Securities License To Your Qualifications?

    Clients love planners who sell securities, but a securities license takes a lot of work. Learn if the stress and study are worth it.

  8. How To Report A Tax Cheat

    If you report a tax evader to the IRS, you could be eligible for a reward.

  9. GAAP And The IFRS Standards Convergence Efforts In 3 Substantial Areas

    Understand the specific steps that have been taken in hopes of converging the GAAP and the IFRS accounting standards, despite the philosophically and culturally based methodological differences ...

  10. Outfox The Debt Collector's Hounds

    Dealing with a collection agency is scary if you don't know your rights. We help you take back the power.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

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

  5. Happiness Economics

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

  6. 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.
Trading Center