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Loan Pricing Model: Getting and Retaining Customers

Posted on February 19, 2016July 6, 2018 by Alan_Lee

Loan Pricing Model: Getting and Retaining Customers Loan Pricing Model Loans are the primary way that banks make money. By lending money to customers and charging them interest on it in return, a bank is able to generate revenue that it is able to put back into the bank, or loan back out to other customers. Without loans, banks would only be making money on fees and fines, and the bank would...

Top Three Myths That Prevent Lenders From Adopting a Sound Commercial Loan Pricing Model

Posted on February 5, 2016July 6, 2018 by Alan_Lee

3 Reasons why Loan Pricing models are not used

Top Three Myths That Prevent Lenders From Adopting a Sound Commercial Loan Pricing Model Commercial loan pricing models Are you allowing false beliefs and misconceptions to prevent you from recovering your costs and increasing your profit margins on your loans by adopting a commercial loan pricing model? A reliable and consistent loan pricing model, like the PULPS Loan Pricing Model, help...

Loan Pricing Model Solutions For Community Lenders

Posted on January 22, 2016July 6, 2018 by Alan_Lee

[caption id="attachment_269" align="alignleft" width="230"] Chicago Illinois - Wrigley Building[/caption] Loan Pricing Model Solutions For Community Lenders Loan Pricing Model I live in a suburb of Chicago, but talk to bankers from all over. Finding the right Loan Pricing Model is a herculean responsibility faced by the officers of community banks and credit unions. The hazard of applying ...

Commercial Loan Pricing Variables

Posted on January 8, 2016July 6, 2018 by Alan_Lee

Commercial Loan Pricing Variables Commercial Loan Pricing Commercial loan pricing is done for the smallest to the largest commercial loans. Every loan has a rate, duration, fees and other terms that define the price for that loan. Lots of variables to consider. Pricing should be based on a defined and defensible methodology. It also can be influenced by individual discussions between the r...

Commercial Loan Pricing Pitfalls for Bank Executives

Posted on December 24, 2015July 6, 2018 by Alan_Lee

Commercial Loan Pricing Pitfalls for Bank Executives Commercial Loan Pricing Navigating the common pitfalls of commercial loan pricing are hazardous. Here are a few of the danger zones that you should avoid. Overemphasizing Credit A better credit forces a banker into a thinner spread; however, are you properly managing the balance between credit and the net interest margin? This is...

Profitability of Commercial Loans at Banks Affected By Easing of Lending Standards

Posted on December 11, 2015July 6, 2018 by Alan_Lee

Profitability of Commercial Loans at Banks Affected By Easing of Lending Standards Profitability of Commercial Loans at banks When issuing a commercial loan, your costs to originate and service the loan are the same, regardless of the principle amount borrowed. Your ability to earn a profit for your organization is therefore most dependent upon the actual terms of the loan. Another facto...

Proper Commercial Loan Pricing Is Key To Lending Success

Posted on November 27, 2015July 6, 2018 by Alan_Lee

Proper Commercial Loan Pricing Is Key To Lending Success Commercial Loan Pricing A lending institution's lifeblood is its commercial loan business. Although consumer loans generate a hefty sum of business, commercial loans easily outdistance them in revenue and return on investment. So with that being the case it is important to have a commercial loan pricing scheme that will bring in busine...

The Pitfalls of Commercial Loan Pricing: What Bankers Need To Know, And Avoid

Posted on November 13, 2015July 6, 2018 by Alan_Lee

The Pitfalls of Commercial Loan Pricing: What Bankers Need To Know, And Avoid Commercial Loan Pricing Believe it or not, there are a lot of pitfalls in commercial loan pricing, and in this blog, we're going to discuss them, and how you can avoid them. Many banks today use a spread-based pricing model instead of a risk-adjusted return on capital (RAROC) model. Approximately 15% of banks wh...

What Kind of Community Banker Are You: Panters or Loan Pricing Modeler?

Posted on October 30, 2015July 6, 2018 by Alan_Lee

What Kind of Community Banker Are You: Panters or Loan Pricing Modeler? Do you use a Loan Pricing Model? According to Tom Farin of Independent Banker, "Community banks generally fall into two camps -- those that price by the seat of their pants based on competitor rates, and those that use loan-pricing models." Both arguments have merit. On the one hand, markets have a strong influen...

Discover New Markets with Our Commercial Loan Pricing Model

Posted on October 16, 2015July 6, 2018 by Alan_Lee

Discover New Markets with Our Commercial Loan Pricing Model Commercial loan pricing model Every bank is looking for an edge in the competitive lending industry. Some banks leverage their advantages, using their extensive capital holdings and a long, international reach to undercut rates in specific lending markets (at least temporarily). Other banks have to compete without these advantages. ...

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