What is collateral value in SAP FS-CML - Loans Management?

SAP Term: collateral value

• Component: FS-CML

• Component Name: Loans Management

• Description: An estimate of value, as determined by the lender, of the object or right for example, a property pledged by the borrower as collateral.

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• Key Concepts: 
  Collateral value is a term used in the FS-CML Loans Management component of SAP. It is the value of an asset that is used as security for a loan. The collateral value is determined by the lender and is based on the current market value of the asset. 
  
  How to use it: 
  In SAP, collateral value is used to determine the amount of a loan that can be approved. The lender will assess the collateral value of an asset and use it to determine the maximum loan amount that can be approved. The collateral value must be updated regularly to ensure that it reflects the current market value of the asset. 
  
  Tips & Tricks: 
  When assessing collateral value, it is important to consider factors such as market conditions, inflation, and other economic factors that may affect the value of an asset. Additionally, lenders should ensure that they are aware of any changes in the law or regulations that may affect the collateral value of an asset. 
  
  Related Information: 
  For more information on collateral value and how it is used in SAP, please refer to the SAP Help Portal or contact your local SAP representative.