Banking terms beginning with L

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Alphabetical List

Late Charge:

A payment evaluated by the lender for a borrower and obtains it after a premeditated date is termed as Late Charge. Fine is implied for aberrant payments on a credit after a Grace Period of ten to fifteen days has passed. Late charge is computed as a proportion of the unpaid balance and is generally eliminated from the outstanding interest of the loan.


The utilization of different fiscal tools or loaned capital to elevate the capability of potential profits from an investment is termed as Leverage.

In other word, Leverage is an amount of debit utilized to fund a company's assets. A highly leveraged company comprises more obligations than equity. Leverage triggers investments on part of both investor and company.

Leveraged Buy-Out (LBO):

The acquirement of a business entity by utilizing considerable sum of borrowed capital, through bonds or loans, to fulfill the expenses met during acquisition. Generally, the properties of the company being obtained are utilized as loan securities incorporating the properties of the obtained firm. The intention of leveraged buyouts is to permit firms to indulge in money-spinning acquisitions without entrusting a huge amount of money.


The legal responsibility of the firm that occurs during commercial operations is termed as liability. These liabilities are met through relocation of fiscal advantages which incorporates capital, products and services.


The LIBOR is an extensively used yardstick for interim interest rates. It is the rate at which privileged borrowers from all over the world are competent enough for borrowing money. LIBOR are also referred to the interest rates allotted for the less favored world's borrowers.

Life of Loan:

A loan borrowed from a bank for a certain capital with a precise reimbursement agenda and a balanced interest rate. Life of a loan is between 1 to 10 years.


London International Financial Futures and Options Exchange (LIFFE) was formed after the initiation of Chicago Board of Trade and the Chicago Mercantile Exchange. It dealt with futures, alternatives and products agreements. In the year 2002, it was obtained by Euronext in order to elevate its existence as a derivatives seller. After the acquisition LIFFE was rechristened as Euronext.liffe.

Line of Credit:

An understanding between a bank and a consumer ascertaining an utmost loan equilibrium that the financial institution can allow the borrower to retain is known as Line of Credit. The benefit of Line of Credit in case of ordinary loan is that the borrower is not entitled to forfeit on behalf of the portion of line of credit that he generally doesn't utilize.


When the operation of a company come to an end or when the company is considered as bankrupt, then its properties are sold, advance amount is paid to the creditors and surpluses are circulated to shareholders. In other words Liquidation is referred to any kind of business deal that equalizes or terminates a short-term or long-term arrangement.

Liquidity risk:

The risks arising from the absence of profitability of an investment or deposit that can neither be purchased nor traded promptly to avert or reduce any kind of loss is termed as Liquidity risk.

Loan Tenure

The tenure is the duration for which a loan is given. So, if your loan tenure is 20 years, you will need to pay it off once that period gets over. The bank may increase the loan tenure if the interest rates have moved up significantly.

London Clearing House:

London Clearing House is an association related with an exchange to deal with the verification, payment and release of contracts along with satisfying the key responsibility of ascertaining that the dealings are done in a speedy and well-organized way.

Loyalty Points/Reward Points
These are the points thats you swipe your credit card to do a transaction at select merchant establishments. The number of points that you earn for the amount spent through the cared varies across card-issuing institutions. These points can be redeemed to shop for select products as provided by the card-issuing institution or the co partner in case of co-branded cards.

Last Updated on 1/18/2012