GROUP 1

LEADER: PANALIGAN, MARIDEL

MEMBERS: ARAGONCILLO, KENT MARK

DELOS REYES, MARIA MAYGIE

MILES, MERBEL

MORENO, MARK JOMARI

OLIVAR, SHAINA

PABLICO, JHEDELLMINA

QUINO, JASMIN

SALDIVAR, MARYZEN
REBUS

For instance
Credit
Products
and Services
 It means any and all commitments or obligations
under which the Bank agrees to make payments on
behalf of or for the account of the Borrower,
including letters of credit, guarantees or other
arrangements intended to facilitate transactions
between the Borrower and third parties, or under
which the Bank enters into a credit or financial
accommodation, agreement or other arrangement
with the Borrower, irrespective of whether the
Bank’s obligation is contingent or conditional.

- Credit Products and

Services
 02
Overdrafts
 Overdraft

An overdraft is an extension of credit from a lending institution that is

granted when an account reaches zero. The overdraft allows the account holder
to continue withdrawing money even when the account has no funds in it or
has insufficient funds to cover the amount of the withdrawal.
 Types of Overdraft

Authorised overdrafts: are arranged in advance, so they’re also known as ‘arranged’

overdrafts. You agree a limit with your bank, and can spend money up to that limit.
Your bank will charge you interest, and sometimes other fees on top.

Unauthorised overdrafts: these are also known as ‘unplanned’ or ‘unarranged’

overdrafts and happen when you spend more than you have in your bank account
without agreeing it in advance. This includes going over the limit of an authorised
overdraft.
 03
Personal Loans
 A personal loan is a loan you
qualify for based on your credit
history and income. Personal
Personal loans are sometimes called
signature loans or unsecured
Loan loans because there is typically
no collateral required to secure a
personal loan.
 Collateral is an asset that can
be seized and sold to repay the
loan. Home loans are secured by
the home being financed. In most
cases, lenders approve personal Collateral
loans by evaluating your
creditworthiness.
 Personal Loan

Personal loans are relatively easy to apply for and qualify for when compared
to home and auto loans. That makes them useful for everything from small home
improvements to expensive purchases. You can use the money for almost anything,
but it’s wise to borrow only as much as you need—and only for things that improve
your finances or make a significant impact on your life.

Alternate names: Signature loans, unsecured loans

 Types of Personal Loan
● Standard Personal Loans

Banks and credit unions have a long history of offering personal loans. You can often apply in
person or online and receive funds in your checking account quickly.

● Online Lenders

Peer-to-peer (P2P) sites and other online lenders offer loans from investors and financial
institutions. These services are the most likely to use alternative credit scoring models, and the
application process is often easy.

● Specialized Lenders

Some lenders work directly with service providers. They might fund dental work, fertility
treatment, or landscaping projects. Borrowing is convenient, but it’s wise to shop around and
compare offers.
 Spending a Personal Loan
Consolidating Debt- If you owe money on credit cards with high interest rates, you can pay off those debts with a personal
loan that has a lower rate. You can eliminate debt more quickly because less of each monthly payment goes toward interest
costs.

Small Home Improvements- It’s common to use home equity loans for home improvement projects because you're
reinvesting in your property. But if you don’t need a significant amount, a personal loan for home improvements may be less
expensive and easier to apply for.

Expensive Purchases- When you need to buy something big or expensive that you don’t have the cash for, a personal loan
could solve your need.

Investing in Yourself- Personal loans may be able to provide funding when you start a business or need to learn new skills for
your career. However, some lenders limit how you can use loan proceeds. For example, some personal loans don't permit you
to use them to pay for higher education expenses.4

Emergencies- Ideally, you have emergency savings available for life’s surprises. But sometimes there are no options besides
borrowing. If you're facing steep medical expenses or another emergency, a personal loan might make sense.
 How to Get Approved for a Personal Loan
Lenders evaluate loan applications based on creditworthiness. Here are the factors they usually consider.

❖ Credit History

Lenders often check your credit or obtain a credit score to find out how you've handled credit in the
past. Your credit reports contain details about previous loans, any late payments, and public records that
lenders might want to know about.

Lenders may also use alternative credit scoring tools. For example, they might look at your history of
on-time rent and utility payments to predict how you’ll repay a loan.3

❖ Income

Lenders need to verify that you have enough income to repay your loan. They may ask for details
about your employment and income. They may also look at your current debt to make sure that adding a
loan payment won’t consume too much of your monthly income.
 04
Credit Cards
Credit Card
A credit card is a thin
rectangular piece of plastic or metal
issued by a bank or financial
services company, that allows
cardholders to borrow funds with
which to pay for goods and services
with merchants that accept cards
for payment.
 Credit Card
A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a
merchant for goods and services based on the cardholder's promise to the card issuer to pay them for the
amounts plus the other agreed charges. The card issuer (usually a bank) creates a revolving account and
grants a line of credit to the cardholder, from which the cardholder can borrow money for payment to a
merchant or as a cash advance.

Credit is a measure of a person’s ability to pay back her debt on time, which is described in a credit
history compiled by a credit bureau.
 Credit Card
A credit card is a type of payment card in which charges are made against a
line of credit instead of the account holder’s cash deposits.

A line of credit, also known as a credit line, is

an open-ended, revolving loan that a
borrower may access on demand. The lender
determines the total amount credit to extend
based on the borrower’s creditworthiness,
and the borrower can access funds from the
line of credit at any time, up to the
maximum amount set by the lender.
 In addition to the standard credit line, the credit card issuer may also grant a separate
cash line of credit (LOC) to cardholders, enabling them to borrow money in the form of cash
advances that can be accessed through bank tellers, ATMs or credit card convenience checks.

Credit cards typically charge a higher annual percentage rate (APR) versus other forms
of consumer loans. Interest charges on any unpaid balances charged to the card are typically
imposed approximately one month after a purchase is made
 Types of Credit Card
There are three types of credit card accounts:

Bank-issued credit cards - offer consumers a wide range of choice in terms of the annual fee
associated with the card, reward and rebate programs, extra benefits such as travel insurance,
as well as the interest rate charged on outstanding balances

Store/priority cards - are essentially credit cards designed for use at a particular chain of
retailers. They will offer you various discounts and other perks when you do spend money at
the stores in question.

Travel/Entertainment cards (T & E Cards) - is best used to cover expenses associated with
the employee's trip
 05
House Purchase
Loans
 House Purchase Loans
Also known as home mortgage. A home mortgage is a loan given by a bank, mortgage
company or other financial institution for the purchase of a residence either a primary
residence, a secondary residence, or an investment residence in contrast to a piece of
commercial or industrial property. In a home mortgage, the owner of the property (the
borrower) transfers the title to the lender on the condition that the title will be transferred back
to the owner once the final loan payment has been made and other terms of the mortgage
have been met.

A home loan (or mortgage) is a contract between a borrower and a lender that allows
someone to borrow money to buy a house, apartment, condo, or other livable property. A
home loan is typically paid back over a term of 10, 15 or 30 years.
 House Purchase Loans

Advantages Disadvantages
● A mortgage makes home ● You’ll pay back A LOT MORE than
ownership affordable you originally borrowed
● A mortgage is a cost-effective way ● Watch out for fees
of borrowing ● It’s a long term commitment
● Your mortgage repayments are a
way of saving money
● You can create your dream home
 Mortgage Payments
Mortgage payments usually occur on a monthly basis and consist of four main parts:

1. Principal- The principal is the total amount of the loan given.

2. Interest- The interest is the monthly percentage added to each mortgage payment.

3. Taxes- In most cases, mortgage payments will include the property tax the individual
must pay as a homeowner.

4. Insurance- Mortgages also include homeowner’s insurance, which is required by

lenders to cover damage to the home (which acts as collateral), as well as the property
inside of it.
 Different Types of Home Loans Offered by Mortgage
Lenders
Fixed-Rate Mortgages

The most common type of home loan is the fixed-rate mortgage, which requires a borrower to repay
the principal over a "fixed term" (an unchanging length of time) with a "fixed rate" (an interest rate that never
fluctuates over that time period).

Adjustable-Rate Mortgages (ARMs)

Unlike a fixed-rate mortgage with its static interest rates, adjustable-rate mortgages (ARMs) have
variable interest rates that can move up or down over the course of the loan.

Hybrid, Adjustable-Rate Mortgages

A cross between a fixed-rate mortgage and an ARM, the hybrid mortgage offers a fixed rate for a set
term (usually fewer than 10 years) and then allows the interest rate to adjust up or down much like an ARM
loan would.
 06
Bridging Loans
How a Bridge Loan works?
 A short-term loan used until a
person or company secures
permanent financing or removes an
existing obligation. It allows the user What is bridging
to meet current obligations by
providing immediate cash flow. Bridge
loans/ bridge
loans are short term, up to one year, loan?
have relatively high interest rates, and
are usually backed by some form of
collateral, such as real estate or
inventory.
 Businesses turn to bridge loans
when they are waiting for long-term
financing and need money to cover
Businesses expenses in the interim. For example,
imagine a company is doing a round
and Bridge of equity financing expected to close
Loans in six months. It may opt to use a
bridge loan to provide working capital
to cover its payroll, rent, utilities,
inventory costs, and other expenses
until the round of funding goes
through.
 Bridge loans also pop up in the real estate
industry. If a buyer has a lag between the
purchase of one property and the sale of another
property, they may turn to a bridge loan. Typically,
lenders only offer real estate bridge loans to Bridge
borrowers with excellent credit ratings and low
debt-to-income ratios. Bridge loans roll the Loans in
mortgages of two houses together, giving the
buyer flexibility as they wait for their old house to Real
sell. However, in most cases, lenders only offer real
estate bridge loans worth 80% of the combined Estate
value of the two properties, meaning the borrower
must have significant home equity in the original
property or ample cash savings on hand.
 Bridge Loan vs. Traditional Loans

Bridge loans typically have a faster application, approval, and funding process than
traditional loans. However, in exchange for the convenience, these loans tend to have
relatively short terms, high interest rates, and large origination fees. Generally, borrowers
accept these terms because they require fast, convenient access to funds. They are
willing to pay high interest rates because they know the loan is short-term and plan to
pay it off with low-interest, long-term financing quickly. Additionally, most bridge loans do
not have repayment penalties.
Potential pros and cons of bridging loans
(Pros of bridging loans)

Convenient: Bridging loans could help ensure you can buy your property straight
away without having to wait for your current home to sell.
Repayments: Depending on how your loan is structured, during the bridging
period you may only need to make repayments on your current mortgage.
Avoid renting: If the timing is right with the bridging loan and the sale/purchase,
it could be possible to avoid the costs and hassle of having to rent a home in the
period between the sale of your existing home and settlement of your new
home.
 Potential pros and cons of bridging loans
(Cons of bridging loans)
Risk if you don’t sell or sell for a price that is not high enough: If you don’t sell your home in
the required time, you could be left with a large interest bill, or risk the bank stepping in to sell
your home. If your property sells for less than you expect, you could also be left with a larger
ongoing loan amount, which could risk putting you into financial difficulty. It could pay to have
a back-up plan.
Loan costs: Bridging finance may require two property valuations (your existing property and
the new property), which could mean two valuation fees, as well as other fees and charges for
the extra loan.
Interest/interest rates: Interest is usually charged on a monthly basis, so the longer it takes to
sell your property, the more interest your new loan will tend to accrue. In addition if you don’t
sell your existing home within the bridging period, you will typically be charged a higher
interest rate.
 Key Takeaways:
● A bridge loan is short-term financing used
until a person or company secures
permanent financing or removes an existing
obligation.

● Bridge loans are short term, typically up to

one year.

● These types of loans are generally used in

real estate.

● Homeowners can use bridge loans toward

the purchase of a new home while they wait
for their current home to sell.
Thank you!
Do you have any questions?