LOAN COMMITMENT Meaning and
Definition
-
A loan commitment refers to a formal agreement made by a lender to provide a borrower with a specific amount of money for a defined purpose. It is an assurance from the lender that they are willing to extend credit to the borrower, usually for a predetermined period of time. This commitment is a legally binding agreement that outlines the terms and conditions under which the loan will be granted.
The loan commitment specifies the loan amount, interest rate, repayment terms, and any other conditions that must be met before the funds are disbursed. It serves as a guarantee to the borrower that they will receive the agreed-upon financing, subject to meeting the outlined requirements. The borrower typically pays a commitment fee for this assurance, which is designed to compensate the lender for the time and resources spent in evaluating the loan application.
Loan commitments are common in various financial transactions, including real estate mortgages, business loans, and personal loans. They provide borrowers with the necessary confidence to proceed with their plans, knowing that the lender has made a firm commitment to provide the requested funds.
It is important for borrowers to thoroughly review the loan commitment and understand all the terms and conditions before accepting it. If the borrower fails to meet the specified requirements, they may lose the loan commitment and any fees paid. However, once the loan commitment is accepted and all conditions are met, the borrower can proceed with the loan closing and receive the funds.
Common Misspellings for LOAN COMMITMENT
- koan commitment
- poan commitment
- ooan commitment
- lian commitment
- lkan commitment
- llan commitment
- lpan commitment
- l0an commitment
- l9an commitment
- lozn commitment
- losn commitment
- lown commitment
- loqn commitment
- loab commitment
- loam commitment
- loaj commitment
- loah commitment
- loan xommitment
- loan vommitment
- loan fommitment
Etymology of LOAN COMMITMENT
The word "loan commitment" does not have a specific etymology because it is a combination of two commonly used words: "loan" and "commitment". Each word has its own etymology.
The word "loan" comes from the Middle English word "lone" which meant "to lend" or "to grant". It can be traced back to the Old Norse word "lan" or "lān" meaning "a loan" or "to lend". It ultimately goes back to the Proto-Germanic root "laizaną".
The word "commitment" comes from the Latin word "committere" which means "to entrust" or "to connect together". It is formed from the prefix "com-" meaning "together" and "mittere" meaning "to send".
Infographic
Add the infographic to your website:
