Loan Participation Interest
type: Class
alternative label: Loan Fractions
alternative label: Loan Participations
alternative label: Participations
subclass of: R9UcujGuJ216ZiqT4I2aRge
definition: Participations refer to the fractional interests in a loan or pool of loans sold by the original lender to other investors in the secondary market. These investors, known as participants, acquire the rights to receive payments and share in the risks associated with the underlying loans.
example: An investor purchases a participation in a mortgage loan, receiving a proportional share of the interest and principal payments.