Event Loans
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What is Event Loan?
In finance, an "event loan" or "loan event" generally refers to an instance or circumstance that affects the terms or status of a loan agreement. This can include events like a borrower defaulting on payments, a change in the loan's terms, or the loan being fully repaid.
Events of Default:
These are specific situations outlined in a loan agreement that, if they occur, allow the lender to demand immediate repayment of the entire loan amount. Practical Law. Examples include missed payments, breach of contract terms, or change of control of the borrower.
Credit Events:
These refer to negative changes in the creditworthiness of a borrower that can trigger payments under a credit default swap (CDS) or other credit protection instruments. A credit event essentially means a borrower is struggling to repay their debt.
Loan Modification:
This involves changing the terms of an existing loan, such as reducing the interest rate, extending the loan term, or modifying the repayment schedule. This can be triggered by various events, including financial hardship for the borrower or changes in market conditions.
Repayment Events:
These refer to the scheduled repayment of the loan principal and interest, as well as any other fees or penalties.
Loan Termination Events:
These are events that lead to the loan being officially closed and the outstanding balance being repaid.
In simpler terms:
Imagine you have a loan agreement with a bank. An "event loan" would refer to something happening that impacts that loan agreement, like a late payment, a change in the interest rate, or the loan being paid off in full.
