Lombard loan

What are Lombard Loans?

Lombard loans are short-term loans against pledging of goods or securities, which are borrowed at a certain percentage of their value. The mortgage lending rate depends on the quality of the pledge and the extent of the possible price fluctuations.

For example, you can calculate with the following loan-to-value rates based on the respective daily value (price or stock market value):

  • Pfandbriefe and bonds issued by public corporations: 75-80%
  • Stocks and corporate bonds: 50-60%
  • Goods: 50-66%
  • Life Insurance Receivables (Surrender Value): 80%

short-term debt financing

The Lombard loan is a cash loan as part of short-term debt financing. It is granted to a borrower by a credit institution against the pledge of securities, goods, bills of exchange, receivables or precious metals, whereby the pledged goods are not lent in the full amount of their value. Sections 1204 to 1296 BGB apply as the legal basis.

Overdraft

Vom Overdraft unterscheidet sich der Lombardkredit vor allem dadurch, dass er zu einem festen Termin in voller Höhe bereitgestellt bzw. zurückgezahlt wird. Er weist damit nicht die Flexibilität des Kontokorrentkredites auf, wird aber häufig in Anspruch genommen, wenn die Kreditlinie beim Kontokorrentkredit erschöpft ist. Das Kreditinstitut knüpft bei der Gewährung des Lombardkredits an die zu verpfändenden Güter besondere Erwartungen. Sie sollten wertbeständig, schnell liquidierbar und einfach zu bewerten sein. Damit kommen nicht alle Güter für eine Verpfändung in Betracht.

Pledging of securities

The focus is on pledging securities, especially since the credit institution already holds them in custody, so that there is no need to transfer them. Since they are usually traded on an exchange, their value is easy to determine. You will be borrowed between 50 % and 80 %.

Pledging of goods

The pledging of goods is more difficult. They have to be durable and marketable. Determining their value is sometimes not without problems. They are usually stored in a warehouse, and the warehouse receipt is handed over to the bank. The lending limit is around 50 %, but hardly above 65 %.

the Cost of capital orientieren sich am Zinssatz für Spitzenrefinanzierungsfazilitäten der Europäischen Zentralbank. Weitere Kosten sind für die Bewertung, Verwahrung und Verwaltung der verpfändeten Güter möglich. Sie bewegen sich damit in der Nähe der Kosten für den Kontokorrentkredit.


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