Tricky Commercial Loan Officer Interview Preparation Guide

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Availability Float is a time difference between deposits made, and the funds are actually available in the account. It is time to process a physical cheque into your account.

For example, you have $20,000 already in your account and a cheque of another $10,000 dollar is deposited in your account but your account will show balance of $20,000 instead of $30,000 till your $10,000 dollar cheque is cleared this processing time is known as availability float.

‘Bill Discount’ is a settlement of the bill, where your electricity bill or gas bill is sold to a bank for early payment at less than the face value and the bank will recover the full amount of the bill from you before bill due date. For example, electricity bill for XYZ is $1000; the electricity bill company will sell the bill to the bank for 10% to 20% discount to the face value. Here, the bank will buy the electricity bill for $900 whose face value is $1000, now the bank will recover, full amount of bill from the customer i.e $1000. If the customer fails to pay the bill, the bank will put interest on the outstanding bill and ask the customer for the payment.

Adjustment credit is a short-term loan made by the Federal Reserve Bank (U.S) to the commercial bank to maintain reserve requirements and support short term lending, when they are short of cash.

Cheque discounting service is offered only by few banks. For instance, if you have a cheque of $3000 outstation and the cheque will take 7 seven days for clearance, then bank will offer you a service for early payment. The bank can make an early payment, but they will pay only for certain percentage of the actual amount, here they will pay you $2000 but they will charge interest on it and the remaining $1000 will be paid, once the outstation cheques get clear.

Foreign draft is an alternative to foreign currency; it is generally used to send money to a foreign country. It can be purchased from the commercial banks, and they will charge according to their banks rules and norms. People opt for ‘foreign draft’ for sending money as this method of sending money is cheaper and safer. It also enables receiver to access the funds quicker than a cheque or cash transfer.

Payroll cards are types of smart cards issued by banks to facilitate salary payments between employer and employees. Through payroll card, employer can load salary payments onto an employee’s smart card, and employee can withdraw the salary even though he/she doesn’t have an account in the bank.

During your time as a loan officer, there will be customers who become very upset with your decisions. For instance, if a gentleman is unable to get financing for a new home for his family, he may become irate; it will be your responsibility to take ownership of the situation. “In the event that I am dealing with an irate customer, I will take the time to listen to the complaint very carefully and provide empathetic statements. If I cannot provide the exact resolution the customer wants, I will offer other products and services as well as financial advice that may help to calm the situation” is along the lines of what your potential employer wants to hear.

‘LIBOR’ stands for London Inter-Bank Offered Rate. As the name suggest, it is an average interest rate offered for U.S dollar or Euro dollar deposited between groups of London banks. It is an international interest rate that follows world economic condition and used as a base rate by banks to set interest rate. LIBOR comes in 8 maturities from overnight to 12 months and in 5 different currencies. Once in a day LIBOR announces its interest rate.

The classification of loan based on various risks and parameters like repayment risk, borrower’s credit history etc. is known as ‘loan grading’. This system places loan on one to six categories, based on the stability and risk associated with the loan.

A company that has clear communication from person to person, department to department from upper management all the way to the bottom line workers.

The date on which the principal amount of a loan becomes due and payable is known as ‘Loan Maturity’. Yield is commonly referred as the dividend, interest or return the investor receives from a security like stock or bond, interest on fix deposit etc. For example, any investment for $10,000 at interest rate of 4.25%, will give you a yield of $425.

The ‘balloon payment’ is the final lump sum payment that is due. When the entire loan payment is not amortized over the life of the loan, the remaining balance is due as the final repayment to the lender. Balloon payment can occur within an adjustable rate or fixed rate mortgage.

‘Endorsing cheque’ ensures that the cheque get deposited into your account only. It minimizes the risk of theft. Normally, in endorsing cheque, the cashier will ask you to sign at the back of the cheque. The signature should match the payee.

Yes. This is my starting stage of my life and I can do all thing which would help the company towards growth. And weekends and all I may not like it if it regularly phenomenons because everybody wants to take a rest to recollect the energy to work further whether it is a machine or human.

Start-Up Loans:
This type of Loan is offered to borrower to start their business and can be used to build a storefront, to acquire inventory or pay franchise fees to get a business rolling.

Line of Credit:
Lines of credit are another type of business loan provided by commercial banks. It is more like a security for your business; the bank allows the customer to withdraw the amount from readily available funds in an adverse time. Customer or Company can pay back over time and withdraw money again without going into the loan process.

Small Business Administration Loans:
It is a Federal Agency (U.S) that gives funding to small businesses and entrepreneurs. SBA (Small Business Administration) loans are made through banks, credit unions and other lenders who partners with SBA.

There is not much difference between bank guarantee and letter of credit as they both take the liability of payment. A bank guarantee contains more risk for a bank than a letter of credit as it is protecting both parties the purchaser and seller.

Commercial bank is owned by the group of individuals or by a member of Federal Reserve System. The commercial bank offer services to individuals, they are primarily concerned with receiving deposits and lending to business. Such bank earns money by imposing interest on the loan borrowed by the borrower. The money that is deposited by the customer will be used by the bank to give business loan, auto loan, mortgages and home repair loans.

Loan officers are often held to strict goals in regard to the number of loans they close per month. Your potential employer will want you to provide some information about the way is in which you intend to meet these goals. For instance, you may be told that you will need to close 20 loans per month. “I work very hard to meet goals and I have developed several methods for doing so. I pre-screen applicants to determine whether or not they have the credit necessary for a loan. This allows me to focus my attention on only those clients who may ultimately be approved” is a great way to start an answer, but you should elaborate further on additional methods.

They will be selling properties if times slow down and generating more opportunities if a slack time occurs. Also, quality of leads could be better as well.

You can operate your bank accounts in different ways like

a) Internet banking

b) Telephone or Mobile banking

c) Branch or Over the counter service

d) ATM ( Automated Teller Machine)

A cashier cheque issued by the bank on behalf of the customer and takes the guarantee for the payment. The payment is done from the bank’s own funds and signed by the cashier. The cashier cheque is issued when rapid settlement is necessary.

I am very efficient and organized with paperwork. I like to keep papers and paperwork together through files and folders and which helps me insure that I maintain attention to detail without getting documents misplaced.

Since I have no other ongoing commitments as of current I still have pen doors for opportunities arising my way.

In a market where the value of assets is falling, known as a bear market, traders might consider taking short positions, that is, borrowing assets they don't own, selling them, and buying them back to return them at a later date when their price has fallen.

Meanwhile, those working in asset management or M&A might consider, or advise clients to consider, snapping up undervalued assets.

The debt-to-income ratio is calculated by dividing a loan applicant’s total debt payment by his gross income.