Passbook Loan

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What is 'Passbook Loan'

A personal loan extended to a savings-account holder by the custodial bank. Passbook loans use the balance of the savings account as collateral for the loan. The amount of the loan therefore cannot exceed the savings-account balance.

Explaining 'Passbook Loan'

Passbook loans are considered low-risk transactions due to the accessibility of their collateral to the lender. The borrower must hand over the passbook to the bank until the loan is repaid. The bank can also simply place a hold on the funds in the savings account up to the amount of the loan.

An economic theory of self-control
www.journals.uchicago.edu [PDF]
… Lending procedures are dominated by the passbook system, and few smallholders are able to obtain passbooks … Key criteria that must be applied to any policy intervention in lending are adequate loan recovery rates, market interest rates, and mobilization of deposits …

Bankers' perception towards Bai Salam method for agriculture financing in Pakistan
link.springer.com [PDF]
… Lending procedures are dominated by the passbook system, and few smallholders are able to obtain passbooks … Key criteria that must be applied to any policy intervention in lending are adequate loan recovery rates, market interest rates, and mobilization of deposits …

Informal finance and the design of microfinance
www.jstor.org [PDF]
… Lending procedures are dominated by the passbook system, and few smallholders are able to obtain passbooks … Key criteria that must be applied to any policy intervention in lending are adequate loan recovery rates, market interest rates, and mobilization of deposits …

Banks and regional economic development
www.jstor.org [PDF]
… Lending procedures are dominated by the passbook system, and few smallholders are able to obtain passbooks … Key criteria that must be applied to any policy intervention in lending are adequate loan recovery rates, market interest rates, and mobilization of deposits …

Scale economies in the savings and loan industry before diversification
www.sciencedirect.com [PDF]
… Lending procedures are dominated by the passbook system, and few smallholders are able to obtain passbooks … Key criteria that must be applied to any policy intervention in lending are adequate loan recovery rates, market interest rates, and mobilization of deposits …

An Analysis of Post‐Deregulation Savings‐and‐Loan Failures
onlinelibrary.wiley.com [PDF]
… Lending procedures are dominated by the passbook system, and few smallholders are able to obtain passbooks … Key criteria that must be applied to any policy intervention in lending are adequate loan recovery rates, market interest rates, and mobilization of deposits …

Loan loss provisions during the financial crisis in Ukraine
www.tandfonline.com [PDF]
… Lending procedures are dominated by the passbook system, and few smallholders are able to obtain passbooks … Key criteria that must be applied to any policy intervention in lending are adequate loan recovery rates, market interest rates, and mobilization of deposits …

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Q&A About Passbook Loan

What can happen if you fail to repay your passbook loan on time?

The bank can place a hold on funds in your savings account up to the amount of your outstanding debt.

What does Somerset Federal Credit Union offer?

Somerset Federal Credit Union offers Passbook Loans.

What is a passbook loan?

A passbook loan uses the balance of a savings account as collateral, which makes it of low risk for a lender.

What are some characteristics of passbook loans?

Passbook loans are considered low-risk transactions due to their accessibility and availability of collateral.

Where do you hand over your passbook when taking out a passbook loan?

You must hand over your passbook to the bank until you have repaid your debt.

How does a passbook loan use the balance of the savings account as collateral for the loan?

The amount of the loan cannot exceed the savings-account balance.

What does Navy Federal Credit Union offer?

Navy Federal Credit Union offers Passbook Loans.

What does Community Savings Bank offer?

Community Savings Bank offers Passbook Loans.

What does BankFive offer?

BankFive offers Collateral Loans.

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