compensating balance - funds deposited by a commercial borrower in an interest-bearing account at a savings institution as an inducement to the institution to approve a loan. Line-of-credit agreements will often tie the maximum amount of the loan to a percentage of compensating balance. Compensating balances are not commonly required in residential mortgage lending.

© 2004 Bella Vista Publishing Company, Inc.  ISBN 0-9718225-0-6

.
	Copyright Protection:   This real estate web site is created in the United States of America and protected by copyright laws.  Permission should be obtained prior to any reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording or likewise.
.