Wednesday, December 19, 2018

Long Term Loans Erosion

I found this expression in a Singapur text. What does it mean? Economic dictionaries have profit erosion, due to a number of events but this is different. Long term fixed interest loans get eroded because of inflation. Or they lose its worth by annual bank maintenance expenses.

Maybe the creditworthiness of the debtor changes with the time, gets worse. Maybe the difficulty of recouping the money increases with time? Who knows?
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