Interest Rate Collar
What does it mean
Loan Interest Collar refers to the limit on how high or low any single loan interest rate is allowed to change at the next interest rate reset.
Why does it matter
Interest Rate Collars matter because as with anything that has to do with loan structuring, the specifics are only restricted by your level of creativity and ability to negotiate. An Interest Rate Collar essentially slows the pace of increases or decreases in the loan interest rate. This can have both positive and negative impacts to either the bank or the borrower, but it is another tool available to negotiate a deal with your customer.
Other Relevant Terms
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Greetings! I'm Clay Sharkey, and there is nothing I like more than assisting others in achieving their goals. I firmly believe that by enhancing a banker's understanding of their customer's' business, they can provide superior service. This superior service, in turn, leads to stronger relationships for the bank, improved performance for the businesses, and better experiences for our communities. Win-win-win.
