BLC Bank

What to know

BLC Bank’s glossary of banking terms and definitions assists you in better understanding the terms used in the financial products and services. You can find in it the definitions to commonly used banking terms.

• Account

  Value date: Specific date at which time the funds will become available or deducted from the account.

  Minimum Balance: The amount of money required to be on deposit in an account to qualify the depositor for special services or to waive a service charge.

  Joint Account: An account owned by two or more persons. And/OR: Either of the account holders may manage the account. And: Both persons have to sign for each transaction.

  Individual Account: An account owned by one person.

  Cards

  Revolving Credit Card: A credit agreement that allows a customer to borrow against a credit line from the bank when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus interest due.

  Point of Sale (POS): The location at which a transaction using the BLC Bank cards takes place.

  Minimum Payment: The minimum amount that must be paid each month on a credit card defined by client and based on Bank conditions.

  Debit Card: Card allowing the holder to withdraw money directly from his bank account.

  Charge Card: A card that charges no interest but requires the user to pay his/her balance in full upon receipt of the statement on a monthly basis.

  Billing Date: The billing date for credit cards is on the 20th of each month, it represents the date on which all the utilized amount during the previous billing cycle is subject to interest unless total outstanding amount is settled by client before the billing date, no interest will be charged on his account.

  Billing Cycle: The billing cycle is 40 days which represents the time interval between the dates on which regular periodic statements are issued.

• Interest

  Interest rate: that changes on a periodic basis.

  Regressive Interest: Interest calculated on the remaining loan amount after each installment.

  Interest: The term interest is used to describe the cost of using money.

  Flat Interest: Interest calculated on the total loan amount.

  Fixed Rate: Interest rate that never changes during the contract period between the bank & client.

  Index Rate

  Treasury Bills: Treasury bills, also known as “T-bills,” are a security issued by a government. It is represented by investment return and secured by the government.

  Cost of Funds: All banks have a cost, known as cost of funds, due to the interest they pay to clients on their deposits. These costs are compensated by the interest charged on loans which take into consideration the cost of funds and other expenses the bank may incur.

  Beirut Reference Rate: The Beirut Reference Rate (BRR), considered as the reference rate for lending in foreign currency, replaced the London Inter-Bank Offering Rate (LIBOR) in 2009 as the ABL considered that the LIBOR no longer accurately reflects the cost of funding and lending in Lebanon.

  Loans

  Prepayment & Payoff Penalties: A penalty imposed on a borrower for repaying the loan before its due date.

  Prepayment: The payment of a debt before it actually becomes due.

  Payoff: The complete repayment of a loan, including principal, interest, and any other amounts due. Payoff occurs either over the full term of the loan or through prepayments.

  Overdraft: When the amount of money withdrawn from a bank account is greater than the amount actually available in the account, the excess is known as an overdraft, and the account is said to be overdrawn.

  Online & Mobile Banking: A service that allows an account holder to obtain account information and manage certain banking transactions through a mobile phone or a personal computer via the financial institution’s website on the Internet. (This is also known as Internet or electronic banking).

  Mortgage: A debt instrument used in a real estate transaction where the property is the collateral for the loan. A mortgage gives the lender the right to sell the property and in some cases to take possession of it, through the court, in settlement of the dues, if the borrower fails to pay off the debt.

  Maturity: The date on which the principal balance of a loan or other financial instrument becomes due and payable.

  Guarantor: A party who agrees to be responsible for the payment of another party’s debts should that party default.

  Delinquency: A debt that was not paid when due.

  Deferred Payment: A payment postponed until a future date.

  Debtor: Someone who owes money to another party, the Bank.

  Collateral: Assets that are offered to secure a loan or other credit. For example, if you get a real estate mortgage, the bank’s collateral is typically your house. Collateral becomes subject to seizure on default.

  Check: A written order instructing a financial institution to pay immediately on demand a specified amount of money from the check writer’s account to the person named on the check or, if a specific person is not named, to whoever bears the check to the institution for payment.

  Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract.

  Appraisal: The act of evaluating and setting the value of a specific piece of personal or real property.