What constitutes a material change to the loan?

A material change to a loan typically refers to significant alterations that affect the terms or conditions under which the loan was originally granted. This includes changes that require additional scrutiny or approval from relevant stakeholders, such as lenders or compliance departments.

In this context, a change in structure requiring additional approval signifies that the modifications are substantial enough to alter the risk profile or obligations related to the loan. This could involve restructuring the loan agreement, changing the type of loan, or significantly altering repayment schedules that might impact the lender's and borrower's original agreement.

Changes in collateral value can also suggest a shift in the loan's risk, but they may not necessitate a structural change or require fresh approval. Minor adjustments to payment terms typically do not rise to the level of materiality, as they are often seen as normal course adjustments. Documenting customer feedback can be valuable but does not constitute a change to the loan’s terms or conditions. Thus, the most accurate representation of a material change is linked to structural adjustments needing additional approvals.