Whole Loan

A whole loan is a loan that is not sold to a secondary market. This means that the lender retains the entire risk of the loan and is responsible for collecting all payments. Whole loans are often used for commercial real estate loans, as they can provide lenders with more flexibility and control over the terms of the loan.

There are two main types of whole loans: fixed-rate loans and adjustable-rate loans. Fixed-rate loans have a constant interest rate for the entire term of the loan, while adjustable-rate loans have an interest rate that changes periodically based on an index such as the prime rate.

Whole loans can be either originated by banks or by non-bank lenders. Bank-originated whole loans are typically sold to the secondary market, while non-bank-originated whole loans are more likely to be held by the lender.

Whole loans can be a good option for borrowers who want a more customized loan product. However, they also come with some risks, such as the potential for higher interest rates and fees.

Here are some of the pros and cons of whole loans:

**Pros:**

* More flexibility and control over the terms of the loan
* Potential for lower interest rates
* No prepayment penalties

**Cons:**

* Higher interest rates and fees
* Potential for higher risk
* No secondary market liquidity

Whole loans can be a good option for borrowers who are looking for a customized loan product and who are willing to take on some risk. However, it is important to carefully weigh the pros and cons before deciding whether a whole loan is right for you.