Loan Servicing and Collection

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The term that is defined as every aspect of an applicant's dealing with a creditor, beginning with information gathering and continuing through to the servicing and collection of the loan is "Credit Transaction."

A credit transaction involves a borrower seeking funds from a creditor or lender, such as a bank or financial institution. The process of a credit transaction typically involves several steps, including the borrower submitting a credit application, the creditor conducting a credit check, negotiating credit terms and conditions, disbursing funds to the borrower, and managing the ongoing repayment and servicing of the loan.

During the credit transaction process, the creditor may consider various factors to evaluate the borrower's creditworthiness, such as their credit score, income, employment history, debt-to-income ratio, and other relevant financial information. The terms and conditions of the credit transaction may also vary depending on the borrower's creditworthiness, as well as the type of loan being sought and the creditor's policies and procedures.

Once the loan has been disbursed, the creditor will typically manage the ongoing servicing and collection of the loan, which may involve sending statements, processing payments, managing delinquencies, and pursuing collections if the borrower fails to make timely payments.

Therefore, understanding the credit transaction process is crucial for both borrowers and creditors to ensure that credit is managed efficiently and effectively, while also minimizing the risks associated with lending and borrowing.