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LSDefine

Simple English definitions for legal terms

compensating balance

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A quick definition of compensating balance:

A compensating balance is a certain amount of money that someone who borrows money from a bank has to keep in their account as a condition for getting the loan or line of credit. It's like a deposit that the bank requires to make sure the borrower can pay back the loan.

A more thorough explanation:

A compensating balance is the minimum amount of money that a borrower must keep on deposit with a bank as a condition for a loan or a line of credit. This balance is usually a percentage of the loan amount and is held in a non-interest-bearing account.

Let's say a business wants to borrow $100,000 from a bank. The bank may require the business to maintain a compensating balance of 10%, or $10,000, in a non-interest-bearing account for the duration of the loan. This means that the business can only use $90,000 of the loan proceeds and must keep $10,000 on deposit with the bank.

Another example is a personal line of credit. If a person wants to open a line of credit with a bank, the bank may require them to maintain a compensating balance of 5% of the credit limit. For instance, if the credit limit is $10,000, the person must keep $500 on deposit with the bank.

These examples illustrate how a compensating balance works. It is a way for banks to ensure that borrowers have a vested interest in repaying their loans and to offset the risk of lending money.

compensated surety | compensatio

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im distracting myself by schizo-scrolling r/lawschoolamissions and every conceivable data point on this godforsaken website
it is not working
Haaa I naturally want to do that too. I’m trying to stop. They need a surgeon general’s warning on this site for perspective law students
i spend more time on here then anything else trying to rationalize that the waves from last year will match waves for this year (they won't) and that the stats of people with the same stats are indicative of my own (they aren't)
There aren't many people in my stat range so I pretty much know every result in my range after being on here for a few years
9:28
congrats on the 172 bruce
go dawgs fr
9:29
roll tide
do we foresee a fordham election day wave today (i'm delusional)
WorthlessAttractiveZombie
9:31
I think so, Jack
9:31
some people hate him. some people love him, but he a real one: https://youtu.be/w5oEqiVQcF4?t=173
9:32
[kevin oleary]
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
WorthlessAttractiveZombie
9:34
I mean if Fordham doesn't release today I will purposefully get on a train, go to new york, and then take the stinkiest shit inside the admission office's toilet (potentially clogging it and forcing them to get a plumber)
IS IT ONLY ON MY END WHY DID THAT SEND TEN MILLION TIMES
HELLO
WorthlessAttractiveZombie
9:35
it sent a million times lol
WHAT HAPPENED
yeah i thought you were tweaking for a second
i'm so sorry everyone what the actual fuck this website hates me
WorthlessAttractiveZombie
9:35
Jack's just tweaking on LSD no biggie
to be fair this accurately represents my mental state
election day psychosis coming in hot (fordham)
usc pls pull through .....
i literally just need one A so i can relax before my ED decision
WorthlessAttractiveZombie
9:38
oh that's right USC might release
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