Loan Quotation and Terms Proposal

What a good one includes

• A clear summary box at the top showing the total loan amount, interest rate type, and the exact term length.
• An estimated periodic payment breakdown that explicitly details how principal and interest are applied over time.
• A comprehensive, itemized list of all upfront fees, including origination charges, underwriting fees, and closing costs.
• The Annual Percentage Rate displayed prominently to show the borrower the true annual cost of the loan including fees.
• Clear terms regarding prepayment penalties or late payment fees so borrowers understand their flexibility and boundaries.
• A specific proposal expiration date to protect your rate offer and encourage timely decision-making from the applicant.

Common mistakes to avoid

• Hiding origination fees or closing costs in the fine print rather than listing them transparently alongside the interest rate.
• Omitting an expiration date on the proposal, which can lock you into outdated interest rates if market conditions suddenly shift.
• Using overly dense banking jargon that confuses the borrower instead of plain, accessible financial terms.
• Failing to clearly distinguish between the nominal interest rate and the actual Annual Percentage Rate.

Frequently asked questions