| A 'Preferred Loan' (sometimes called a 'Wash Loan') is one in which the impaired funds that are collateral for the loan are earning the same rate of interest as the carrier is charging for interest on the loan itself. The net effect of this is an interest-free loan, or a 'wash', for the Policyholder. It is possible, however, to have borrowed some money on a preferred basis, and some on a regular basis. In that case, this property will indicate the portion of the total loan balance (Holding.LiabilityValue) is 'Preferred'. |
