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Combining a Consumer & a Commercial Loan

Answered by: 
David A. Dickinson

Question: 
A customer comes in to the bank to combine loans, one being a consumer loan and the other being a commercial loan. This seems to cause confusion among the lenders and processors. The method that has always been used is the loan that has the most remaining balance on it prevails. Is this to be considered a consumer loan or a commercial loan? Is there a set of state regs that should be a deciding factor here?
Answer: 

I agree with looking at the loan amounts and you may also want to refer to the Commentary to Section 226.3(a)#1 & #2. These provide guidance on factors to consider in deciding what is a business loan and what is a consumer loan.

First published on BankersOnline.com 11/17/08

First published on 11/17/2008

Filed under: 
Lending
Filed under lending as: 
Loans
Regs

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