Offset Loan

Definition:

A type of loan in which the borrower maintains a savings account with the lender so that the account balance is netted against the loan outstanding for purpose of interest calculation. The interest rate on Offset loans is typically higher than the ones without this feature.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Project

The asset constructed with or owned via a project financing, which is expected to produce cash flow at a debt-service coverage ratio sufficient to repay the project financing.

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