What is property-tied loan in SAP FS-CMS - Collateral Management System?

SAP Term: property-tied loan

• Component: FS-CMS

• Component Name: Collateral Management System

• Description: A loan to natural persons, trading partnership firms or legal persons of the private law. If it is secured by the creation, assignment or pledging of encumbrances on landed properties in the Federal Republic of Germany, then the requirements of §§ 11 and 12 section 1 and 2 of the Mortgage Bank Act are fulfilled. The loan amount may not exceed 60% of the lending value, taking into account rights having an equal or higher ranking in the land register. Property tied loan is a real property loan with hedging of landed properties in Germany.

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• Key Concepts: 
  A property-tied loan is a type of loan that is secured by a property or asset. In the SAP FS-CMS Collateral Management System, this type of loan is used to manage the risk associated with lending money to customers. The collateral is used as a guarantee that the lender will be repaid in the event that the borrower defaults on the loan. 
  
  How to use it: 
  In the SAP FS-CMS Collateral Management System, property-tied loans are managed by setting up a collateral agreement between the lender and borrower. This agreement outlines the terms of the loan, including the amount of money being borrowed, the interest rate, and any other conditions that must be met in order for the loan to be approved. Once the agreement is in place, the lender can monitor and manage the loan through the system. 
  
  Tips & Tricks: 
  When setting up a property-tied loan in SAP FS-CMS Collateral Management System, it is important to ensure that all of the terms of the agreement are clearly outlined and agreed upon by both parties. Additionally, it is important to regularly monitor and review the loan to ensure that all payments are being made on time and that any changes to the agreement are properly documented. 
  
  Related Information: 
  For more information on property-tied loans in SAP FS-CMS Collateral Management System, please refer to SAP’s official documentation on collateral management. Additionally, there are many online resources available that provide detailed information on how to set up and manage property-tied loans in SAP FS-CMS Collateral Management System.