Variable Rate
Advised Line of Credit
Variable Rate Demand Line of Credit (Line of Credit) provides credit to cover shortfalls in a member’s High Yield Liquidity Account (S-21) and is required for credit unions who use Midwest Corporate for settlement services.
Advised Lines of Credit are only available to members who are credit unions.
The loan is advanced automatically at the end of each business day that your credit union has a shortfall in its settlement account. The loan is then repaid, in whole or in part, the next business day at Midwest Corporate’s discretion based on available funds. In this way, your loan is always maintained at the lowest level possible to help you minimize your cost.
The following are features and requirements for Lines of Credit:
- Required of member credit unions that use their High Yield Liquidity Account (S-21) for settlement.
- The rate is reset daily and interest is collected daily (prior to any principle payment) and/or on the last business day of the month.
- Advances are made and payments are collected automatically on a daily basis.
- Maximum limits for Membership Capital Share Deposit shareholders are two times your credit union’s equity for loan officer approval and three times your credit union’s equity for Credit Committee approval. All limits are subject to reduction by any outstanding Term Loan. Members without a Membership Capital Share Deposit account are subject to lower limits.
- Line of Credit limit is subject to reduction, or cancellation, at any time at the discretion of Midwest Corporate Federal Credit Union.
Term Loans
Midwest Corporate offers Term Loans of short duration to members to help with seasonal needs to fund your operations. Term loans longer than six months are also available.
Term loans are only available to members who are credit unions.
Term Loans are offered with a variable-rate or fixed-rate option. You will find that this is a terrific alternative to "selling" certificates to raise operating funds.
The following are features and requirements for Term Loans:
- The maximum aggregate total of term loans outstanding and approved line of credit limit is limited to two times your credit union’s equity for loan officer approval and three times your credit union’s equity for Credit Committee approval, subject to other limits. Non-Membership Capital Share Deposit holders and non-credit union members are subject to lower limits.
- The most common loan durations are from 30 to 180 days. If, after the loan expires, you still need Term Loan funding, you can roll it over, subject to loan officer review and current rates. Longer terms are available.
- Variable-rate option loans have the rate reset every day.
- Fixed-rate option loans are set at time of disbursement.
- Due to our need to match funds, loan prepayment is only permitted with penalty, which is determined at the time of prepayment.
Loan interest and principle is generally collected automatically from your credit union’s High Yield Liquidity Account (S21) on the loan maturity date. Monthly interest payment option is available, as is principle amortizing options.
All Rates And Conditions Are Subject To Change Without Notice.
