Method and apparatus of creating financial instrument and administering an adjustable rate loan system

• US 5,742,775 A
• Filed: 01/18/1995
• Issued: 04/21/1998
• Est. Priority Date: 01/18/1995
• Status: Expired due to Term

• Current Assignee: Investors Guaranty Fund Ltd. (Investors Guaranty GmbH)
• Original Assignee: Investors Guaranty Fund Ltd. (Investors Guaranty GmbH)
• Inventors: King, Douglas L.
• Primary Examiner(s): McElheny, Jr., Donald E.
• Application Number:
  US08/374,017
• Time in Patent Office: 1,189 Days
• Field of Search: 364/401 R, 395/238, 395/239
• US Class Current: 705/38
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

An operatively interconnected data processing and computing system is provided for creating, servicing and paying loan agreements between a lender and borrower providing for repayment of the loan together with interest at a periodically adjusted rate based on the terms of the agreement.

Claims

1. A system employing operatively interconnected data processing and computing means for creating, servicing and paying loan agreements between a lender and borrower providing for repayment of the loan together with interest at a periodically adjusted rate based on the terms of the agreement, said system comprising:

means for inputting and storing the negotiated terms and conditions of a loan agreement with an identified lender into a system database which include at least a principal balance of the loan and the term, an initial period interest rate, compounding and interest rate crediting dates, terms for determining a formula interest rate applicable for a given period of time based at least in part on at least one publicly available external benchmark, and at least one of a life-time maximum interest rate, a maximum periodic interest rate, a life time minimum, a periodic minimum interest which rates can include a performance-based benchmark rate;

means accessible to the system database for issuing the loan agreement with constraints comprising the agreed terms and conditions;

means accessible to the system database for creating and storing in at least one further database a loan account for each loan agreement;

means for computing, allocating and storing in at least one of said databases, initial balances relating to each loan account for at least a balance account, a payment account, a purpose account and a computational account;

means for inputting said external benchmark into the system database;

means accessible to said databases for computing the periodically adjustable interest rate for the next ensuing interest period as a function of a calculated formula interest rate based on the external benchmark and the constraints of the loan agreement;

means accessible to the databases for periodically calculating and reallocating balances in the balance account between at least one of a number of accounts which include the payment account, each purpose account and the computational account based on the terms of each loan agreement stored in the at least one further database;

means accessible to the databases for monitoring and displaying each loan balance account based upon preestablished parameters governing the amount of the loan balance as derived from said databases;

means for inputting into one of said databases expenses related to each loan account in said at least one further databases;

means accessible to the databases for determining the amount and date for payments to be made on each loan account based on information stored in said databases as governed by the terms and conditions of the loan agreement which optionally may include means accessible to said databases for projecting the discounted value of the principal and minimum interest and comparing it with the present loan balance and means accessible to said databases for determining and displaying whether to elect acceleration of the loan repayment as a function of said comparison and other information stored in said databases within constraining limits of the terms of the loan agreement; and

means for the determination of and storage in at least one of said databases of the accreting balance of each loan account derived from information previously stored in said databases.

2. The system of claim 1, comprising:

loan agreement negotiation means coupled to said data bases for the borrower and one or more lenders to enter the terms of said loan agreement which provide for the level of negotiated interest thereon to be adjusted periodically to produce a rate of interest tied to the external benchmark, allowing the borrower to establish and enter a lower rate of interest in any period in which its solvency or deteriorating credit quality, including with respect to the business activity to which the loan agreement relates, is otherwise threatened in exchange for establishment and entering of a higher rate of interest during periods in which the results of a formula computation exceed certain pre-agreed levels.

3. The system of claim 1, comprising:

restriction means coupled to said data bases for identifying and entering particular terms under which funds received from the issuance of the loan agreement will be used by the borrower.

4. The system of claim 1, comprising:

account establishing means coupled to said data bases for creating one or more accounts for the purpose of allocating the financial results of the lender'"'"'s business activities identified to the loan agreement and initially establishing and entering and periodically determining and entering its obligations to the lender and service providers.

5. The system of claim 1, comprising:

rate establishing means coupled to said data bases for initially establishing and entering the external benchmark a basis to reset periodic interest of the loan agreement, establishing and entering periodic rate parameters, and initially establishing and entering the conditions under which the borrower could reduce periodic interest of the agreement to a level less than an amount determined by applying the external benchmark.

6. The system of claim 1, comprising:

recalculation means coupled to the data bases for determining the inputs based on such terms and conditions for recalculating the periodic interest.

7. The system of claim 1, comprising:

prepayment means coupled to the data bases for determining, recording and storing at issuance of the loan agreement the terms under which the borrower could partially or wholly prepay the loan of the agreement during its term.

8. The system of claim 1, comprising:

entering means coupled to the data bases for recording and storing loan agreement purchase, loan agreement terms and conditions, payment information, current interest rate matrix, interest and paying information, acceleration notice provisions, and other load agreement information and lender inquiries.

9. The system of claim 1, comprising:

account allocation means coupled to the data bases for allocating and entering proceeds of said loan agreement to various ones of said accounts established at issuance of the loan agreement, allocation and entering of the lender'"'"'s obligations to borrowers to one or more of said accounts, and for determining account balances at issuance of the loan agreement.

10. The system of claim 1, comprising:

proceeds application means coupled to said data bases for selecting and entering a portfolio of securities and/or application of loan agreement proceeds to other business purposes.

11. The system of claim 1, comprising:

asset position list means coupled to said data bases for recording and storing an asset position list of current balance information concerning application of the loan agreement proceeds.

12. The system of claim 1, comprising:

reporting means coupled to said data bases for generating and entering detail and summary data on initial terms of the loan agreement and the initial status of the borrower'"'"'s assets and its contractual obligations to the lender.

13. The system of claim 1, comprising;

account list means coupled to said data bases for recording and storing an account list of current balance information for each loan agreement, account information and the accounts into which said issuing means has issued a loan agreement.

14. The system of claim 2 comprising:

means coupled to said data bases for recording and storing proposed loan agreement terms, which may include the proposed date of transfer and amount to be tendered by prospective lenders to the borrower, the proposed amounts and dates of repayment by the borrower of such tendered amounts, the dates and method of determining payments of periodic interest to the lenders by the borrower, any restriction(s) on use of loan agreement proceeds, initial interest period and rate of interest, minimum rates of interest, maximum rates of interest, interest rate crediting parameters and formula computation methods, prepayment terms, and other proposed contract terms; and

means for communicating such proposed agreement terms and other information between borrower, prospective lenders, intermediaries and service providers.

15. The system of of claim 5, comprising:

means coupled to said data bases of establishing an initial interest period and an initial rate of interest for such period.

16. The system of claim 5, comprising:

means coupled to said data bases for establishing the external benchmark as the periodic interest rate on government securities of similar term to the loan agreement (remaining term government rate).

17. The system of claim 5, further comprising:

means coupled to said data bases for establishing an adjustment factor including basis point adjustment to augment or diminish an externally determined periodic rate, the resultant periodic value being the external benchmark for determining periodic interest under the loan agreement.

18. The system of claim 5, further comprising:

means coupled to said data bases for establishing a minimum periodic rate of interest.

19. The system of claim 5, comprising:

means coupled to said data bases for establishing a conditional maximum rate of interest during any period by augmenting the external benchmark with a pre-agreed number of basis points (one hundred basis points equalling one percent).

20. The system of claim 5, further comprising:

means coupled to said data bases for establishing a maximum rate of interest for all periods during the life of the loan agreement.

21. The system of claim 5, further comprising:

means coupled to said data bases for determining and inputting into said databases inputs to and computational parameters of a formula which gauges the solvency and credit quality of the borrower'"'"'s periodic activities with respect to the business activities for which the proceeds are dedicated.

22. The system of claim 5, comprising:

means coupled to said data bases for recording and storing periodic dates for recalculation; and

means coupled to said data bases for recording and storing a procedure for periodic rate recomputation.

23. The system of claim 22, comprising:

means coupled to said data bases for allocating and determining revenues and assets of the lender, other than those assets identified to the loan agreement to which its loan agreement proceeds are initially applied, to the establishment and payment of periodic interest and for inputting such into said data bases.

24. The system of claim 7, comprising:

means coupled to said data bases for for recording and storing periodic dates on which the borrower could elect to partially or wholly prepay the loan agreement; and

means coupled to said data bases for recording and storing terms and conditions for periodic interest rate recomputation.

25. The system of claim 7, comprising:

means coupled to said data bases for determining a minimum rate of periodic interest rate to be paid to the lender if the borrower wholly prepays the loan agreement prior to maturity.

26. The system of claim 7, comprising:

means coupled to said data bases for determining a portion of the loan agreement which may not be prepaid prior to maturity.

27. The system of claim 1, comprising:

means coupled to the data bases for establishing and entering the amount and currency of the loan agreement proceeds transferred to the borrower, the maturity date of the loan agreement, the initial interest period, the rate of interest during the initial interest period, the currency in which the loan agreement is denominated, the contract proceeds currency exchange rate if applicable, interest periods, dates and terms under which periodic interest will be accrued and paid, specific interest rate parameters and procedure for determining periodic interest, prepayment provisions, account drawdown provisions, payment procedures, and such other information as the borrower and lenders may agree.

28. The system of claim 1, comprising:

means coupled to said data bases for issuing the loan agreement as a debt obligation, an annuity contract, a guaranteed investment contract, a certificate of deposit, a note, a swap contract, or other financial instrument.

29. The system claim 1, comprising:

means coupled to said data bases for issuing the loan agreement where the borrower is selected from the group consisting of an insurance company, bank, single purpose corporation, individual, trust, mutual fund, investment company, partnership, limited partnership, or other incorporated or unincorporated entity.

30. The system of claim 9, comprising:

means coupled to said data bases for creating said balance account to which an initial balance is credited at issuance of said loan agreement equal to the amount of the proceeds of said loan agreement.

31. The system of claim 9, comprising:

means coupled to said data bases for creating a said computational account to which an initial balance is credited at issuance equal to the amount of proceeds of said loan agreement.

32. The system of claim 31, comprising:

means coupled to said data bases for for allocating from the computational account at issuance of the loan agreement amounts payable to intermediaries and service providers;

means for allocating a portion of the loan agreement proceeds to one or more of said payment accounts; and

means coupled to said data bases for allocating part or all of the proceeds to one or more of said purpose accounts.

33. The system of claim 9, comprising:

means coupled to said data bases for creating a said payment account to which amounts are periodically credited and payments to lenders are deducted therefrom.

34. The system of claim 33, further comprising:

means coupled to said data bases for determining the present value at issuance of the loan agreement of the loan agreement proceeds to be repaid at maturity, based on current interest rates for investment securities.

35. The system of claim 33, further comprising:

means coupled to said data bases for initially allocating investment securities to said payment account which are invested at such current market rates of interest and are sufficient at their respective maturities dates to repay the initial loan agreement proceeds of the loan agreement.

36. The system of claim 33, further comprising:

means coupled to said data bases for determining the present value at issuance of the loan agreement of minimum periodic interest to be paid on one or more periodic interest payment dates in the future, based on current interest rates for investment securities matching such payment dates.

37. The system of claim 33, further comprising:

means coupled to said data bases for initially allocating investment securities

to said payment account which are invested at predetermined rates of interest and are sufficient at their respective maturities dates to pay the minimum rate of periodic interest on the loan agreement on one or more periodic interest payment dates in the future.

38. The system of claim 5, comprising:

means coupled to said data bases for entering, storing, updating and communicating external market rate data used to determine the external benchmark; and

means coupled to said data bases for entering, storing, updating and communicating the results of the periodic rate, and maximum annual interest rates.

39. The system of claim 10, comprising:

means coupled to said data bases for identifying, recording, storing and communicating the specific investments, investment activities, or other purposes for which a portion of the loan agreement proceeds are to be used, and the parameters under which the borrower will conduct such business activities;

means coupled to said data bases for establishing investment quality, currency and duration parameters for investment securities allocated to the payment account; and

means coupled to said data bases for restricting the use of profits generated from the investment of loan agreement proceeds allocated to said purpose account, to enhance the security and repayment of loan agreement obligations, including increasing the level of periodic interest.

40. The system of claim 1, comprising:

date determining means coupled to said data bases for determining that periodic computation, period ending, payment, and maturity dates have occurred or will occur within a preset number of days.

41. The system of claim 1, comprising:

account beginning balance establishing means coupled to said data bases for determining the balance at the end of a previous period of the accounts used for the purpose of allocating the financial results of the borrower'"'"'s business activities identified to the loan agreement and periodically determining its obligations to lenders and service providers.

42. The system of claim 1, comprising:

rate setting means coupled to said data bases for determining and storing the external benchmark to be used to reset periodic interest of the loan agreement, the rate parameters for the period, and the conditions under which the borrower could reduce the periodic interest of the loan agreement to a level less than an amount determined by applying the external benchmark.

43. The system of claim 1, comprising:

input determination means coupled to said data bases for determining the inputs to the accounts for a current period prior to calculation of periodic interest.

44. The system of claim 1, comprising:

account adjustment means coupled to said data bases for determining the inputs to the accounts for the current period after calculation of the periodic adjustable interest rate interest.

45. The system of claim 1, comprising:

payment establishing means coupled to said data bases for determining payments to the lender, intermediaries, and service providers.

46. The system of claim 1, comprising:

account transfer means coupled to said data bases for allocating transfer amounts between the accounts established at said issuance of the loan agreement.

47. The system of claim 1, comprising:

account ending balance establishing means coupled to said data bases for determining and storing the balance at the end of the current period of the accounts used for the purpose of allocating the financial results of the borrower'"'"'s business activities identified to the loan agreement and periodically determining its obligations to the lender and service providers.

48. The system of claim 1, comprising:

prepayment means coupled to said data bases for determining if conditions exist during a period under which the borrower could partially or wholly prepay the loan agreement during its term, and means for partially or wholly prepaying such loan agreement.

49. The system of claim 1, comprising:

restriction means coupled to said data bases for determining allocation of amounts identified to the loan agreement used by the borrower in the identified business activity (ies), consistent with the terms agreed, recorded and communicated at issuance of the loan agreement.

50. The system of claim 1, comprising:

portfolio management means coupled to said data bases for periodically adjusting a portfolio of securities and creating and updating an asset position list periodically.

51. The system of claim 1, comprising:

transaction and inquiry reporting means coupled to said data bases for confirming individual transactions and responding to inquiries from borrowers.

52. The system of claim 1, comprising:

management reporting means coupled to said data bases for periodically generating a report including a summary of load agreements issued, periodic interest allocations to one or more of said lender, payments, asset and liability position, and investment performance.

53. The system of claim 41, wherein the account establishing means comprises:

means for retrieving the previous period ending balance of the balance, payment, and purpose accounts.

54. The system of claim 42, comprising wherein the rate setting means comprises:

means for determining the external benchmark for a given period of said loan agreement and other rate levels, which may include the maximum interest rate for the given period, the loan agreement maximum rate, and a minimum rate.

55. The system of claim 43, wherein the input determination means comprises:

means for determining as of the periodic computation date, after distribution of required payments to one or more lenders, the amount of contract proceeds and accrued interest, if applicable, outstanding to lenders from the borrower, such amount being the balance on the periodic computation date of the balance account.

56. The system of claim 43, further comprising:

means coupled to said data bases for determining the amount of the periodic increase in assets allocated to said purpose account attributable to the computational account in a respective current period.

57. The system of claim 56, comprising:

means coupled to said data bases for establishing the beginning periodic computational balance;

means for retrieving adjustment parameter data agreed at issuance of said loan agreement; and

means for determining an adjusted periodic balance of the computational account to be used in determining periodic interest.

58. The system of claim 43, wherein said input determination means comprises:

means coupled to said data bases for determining the amount of assets allocated to the payment account when compounded to payment date(s) required under the loan agreement using rates of interest accruing on such agreement sufficient to meet all previously agreed terms of the loan agreement; and

means coupled to said data bases for determining, if such assets are insufficient, a percentage as it relates to the balance account of the amount necessary to eliminate such shortfall.

59. The system of claim 6 wherein said recalculation means comprises means for dividing the adjusted periodic balance of the computational account by the balance on a periodic computation date of the balance account, added to the minimum rate, if such rate is funded with assets allocated to the payment account and such payment account is not insufficient on the date of the periodic computation, said result being a formula rate;

and

means for comparing the formula rate to the external benchmark, and other rates which may include a minimum rate, a loan agreement maximum rate, and a maximum rate for the period.

60. The system of claim 6, further comprising:

means coupled to said data bases for determining the amount to be allocated to the computational account if the formula rate is less than the external benchmark to permit the borrower to establish an interest crediting rate for a subsequent period at the external benchmark; and

means coupled to said data bases for determining whether sufficient such amount to be allocated is available for transfer from the purpose account or from other assets or revenues of the borrower to the extent agreed at issuance of the loan agreement, and if note the amount otherwise available for such transfer.

61. The system of claim 6, further comprising:

means coupled to said data bases for establishing an adjustable interest crediting rate at the external benchmark if the formula rate is below the external benchmark and sufficient assets are available for allocation to the computational account;

means coupled to said data bases for establishing the adjustable interest crediting rate at a level below the external benchmark if assets allocated to the computational account are not sufficient to establish such rate at the external benchmark, such lower rate being determined by computing the percentage at which such available assets would be sufficient to fund interest for the subsequent period; and

means coupled to said data bases for establishing the interest crediting rate above the formula rate if such rate does not exceed any periodic maximum or contract maximum rate, and in the event the formula rate does exceed such maximum rates, establishing the interest crediting rate for the subsequent period at the lower of such rates.

62. The system of claim 44, comprising means coupled to the data bases including:

means for determining the present value of the subsequent period adjustable interest rate based on the newly established interest crediting rate;

means for transferring such amount of the present value from the computational account to the payment account; and

means for transferring any remaining balance in the computational account to at least one purpose account or as otherwise as provided in the loan agreement.

63. The system of claim 47, comprising:

means coupled to said data bases for reducing the payment account by any payments made to the lender; and

means coupled to said data bases for increasing the balance account by the accrual of interest based on the interest crediting rate.

64. The system of claim 48, comprising means coupled to said data bases comprising:

means for retrieving the prepayment parameters of the loan agreement;

means for entering, monitoring and reporting changes in investments, interest rates, inflation rates, profits generated on assets identified to the loan agreement and other criteria and information parameters; and

means for determining the effects of changes in interest rates and account balances on the economics of the loan agreement and the appropriateness of prepaying the loan agreement.

65. The system of claim 64, comprising:

means coupled to said data bases for determining a redemption value of assets set aside to assure payment of minimum agreement obligations, and the minimum requirement for loan agreement repayment prior to maturity; and

means coupled to said data bases for determining the cost to defense or repay the loan agreement liability based on the present value of assets identified to the loan agreement, data concerning investment yields, other costs, and the time period to said payment date, which may include any minimum prepayment amounts.

66. The system of claim 64, comprising:

means coupled to said data bases for determining that the prepayment date is within periodic dates on which the borrower can elect to partially or wholly prepay the loan agreement.

67. The system of claim 1, further comprising:

means coupled to said data bases to create subaccounts and periodically allocate a portion of amounts allocated to said accounts to such subaccounts.

68. The system of claim 1, further comprising means coupled to said data bases including:

portfolio management means for selecting an asset portfolio of securities and for creating and updating an asset position list periodically, based on an amount of cash that is available for investment, current composition of the asset portfolio, projected cash need for the following period, projected interest liability schedule, and predefined portfolio selection criteria, in order to generate a stream of cash flows from the asset portfolio that will be sufficient to cover in full in a timely manner the loan agreement obligations; and

means for recording selected security purchase and sale transaction data to update the asset position list.

69. The system of claim 1, comprising:

means coupled to said data bases for entering and identifying a particular business activity and for entering an agreement to the terms under which funds received from the issuance of the loan agreement will be used by the borrower; and

means coupled to said data bases for entering the results of negotiating between a borrower and one or more lenders, the terms of the loan agreement which provide for the level of interest thereon to be adjusted periodically to produce a rate of interest tied to the external benchmark, allowing the borrower to establish a lower rate of interest in any period in which its solvency or deteriorating credit quality is otherwise threatened in exchange for establishment of a higher rate of interest during periods in which the results of a formula computation exceed certain pre-agreed levels.

70. The system of claim 1, comprising:

means coupled to said data bases for the borrower to create and enter one or more accounts for the purpose of allocating the financial results of its business activities identified to the loan agreement; and

means coupled to said data bases for the borrower to create one or more accounts for the purpose of initially establishing and periodically determining its obligations to the lender and service providers.

71. The system of claim 1, comprising:

means coupled to said data bases for initially establishing, entering and periodically updating the external benchmark used to establish periodic interest for the loan agreement.

72. The system of claim 1, comprising:

means coupled to said data bases for initially establishing the conditions under which the lender could reduce periodic interest of the loan agreement to a level less than an amount determined by applying the external benchmark.

73. The system of claim 1, comprising:

means coupled to said data bases for the borrower to periodically establish the level of interest of the loan agreement to the lender for each respective period.

74. The system of claim 1, comprising:

investment management means coupled to said data bases for selecting a portfolio of securities and/or application of contract proceeds to other business purposes, and periodically updating asset allocation accounts; and

reporting means coupled to said data bases for generating detail and summary data on the current status of the borrower'"'"'s assets and its contractual obligations to the lender.

109. The system of claim 1, comprising:

contract negotiations means coupled to the data bases for the borrower and one or more lenders to negotiate aided by electronic means, which may include the use of intermediaries and service providers, the terms of the loan agreement which provide for the level of interest thereon to be adjusted periodically to produce a rate of interest tied to the external benchmark, allowing the borrower to establish a lower rate of interest in any period in which its solvency or deteriorating credit quality, including with respect to the business activity to which the contract relates, is otherwise threatened in exchange for establishment of a higher rate of interest during periods in which the results of a formula computation exceed certain pre-agreed levels;

electronically recording and communicating the terms under which funds received from the issuance of the loan agreement will be used by the borrower.

110. The data processing system of claim 1, comprising:

means coupled to said data bases for electronically allocating agreement proceeds to various accounts established at issuance of the loan agreement, allocation of the borrower'"'"'s obligations to lenders to one or more accounts, and determining account balances at issuance of the loan agreement;

means coupled to said data bases for recording and storing, by data processing means, an asset position list of current balance information concerning application of agreement proceeds;

reporting means for electronically generating detail and summary data on initial terms of the loan agreement(s) and the initial status of the borrower'"'"'s assets and its contractual obligations to the lender; and

means coupled to said data bases for electronically recording and storing an account list of current balance information for each loan agreement, account information and the accounts into which said issuing means has issued a loan agreement.

111. The system of claim 1, comprising:

means coupled to said data bases for electronically recording an initial interest period and an initial rate of interest for such period;

means for establishing, storing and updating, by data processing means, the external benchmark as the periodic interest rate on government securities of similar term to the loan agreement (remaining term government rate);

means for electronically determining and storing an adjustment factor including basis point adjustment to augment or diminish an externally determined periodic rate value, said resultant periodic value being the external benchmark for the purposes of determining periodic interest under the financial contact;

means for inputting and storing a minimum periodic rate of interest, a conditional maximum rate of interest during any specific period by way of augmenting the external benchmark by a pre-agreed number of basis points (one hundred basis points equalling one percent), a maximum rate of interest for all periods during the life of the loan agreement; and

means for determining, aided by data processing means, inputs to and computational parameters of a formula which gauges the solvency and credit quality of the borrower'"'"'s periodic activities with respect to the business activities for which the contract proceeds are dedicated.

112. The system claim 6, comprising:

means for electronically recording and storing periodic dates for said recalculation; and

means for electronically recording and storing a procedure for periodic rate recomputation.

113. The system of claim 112, further comprising:

means for electronically determining, recording and storing revenues and assets of the borrower, other than those assets identified to the loan agreement to which its agreement proceeds are initially applied, allocated to the establishment and payment of periodic interest.

115. The system of claim 110, comprising data processing means coupled to the data bases for:

creating said balance account to which an initial balance is credited at issuance equal to the amount of loan agreement proceeds;

creating said computational account to which an initial balance is credited at issuance equal to the amount of loan agreement proceeds;

allocating from the computational account at issuance amounts payable to intermediaries and service providers;

allocating a portion of loan agreement proceeds to one or more of the payment accounts;

allocating part or all of the loan agreement proceeds to one or more purpose accounts; and

allocating to said payment account amounts which are to be periodically credited and payments to lenders which are to be deducted therefrom.

116. The system of claim 115, wherein said data processing means includes means for:

determining the present value at issuance of loan agreement proceeds to be repaid at maturity, based on current interest rates for investment securities;

initially allocating investment securities to said payment account which are invested at such current market rates of interest and are sufficient at their respective maturities dates to repay the initial loan agreement proceeds;

determining the present value at issuance of minimum periodic interest to be paid on one or more periodic interest payment dates in the futures, based on current interest rates for investment securities matching such payment date(s);

initially allocating investment securities to said payment account which are invested at predetermined rates of interest and are sufficient at their respective maturities dates to pay the minimum rate of periodic interest on the loan agreement on one or more periodic interest payment dates in the future.

117. The data processing system of claim 1 comprising means coupled to said data bases for electronically entering, storing, updating and communicating:

external market rate data used to determine the periodic external benchmark; and

the results of periodic rate formula, and maximum annual interest rates.

118. The system of claim 115, wherein the data processing means includes:

means for electronically recording, storing and communicating the specific investments, investment activities, or other purposes for which a portion of the loan agreement proceeds are to be used, and the parameters under which the borrower will conduct such business activities;

means for electronically monitoring investment quality, currency and duration parameters for investment securities allocated to the payment account(s); and

means for restricting, the use of profits generated from the investment of loan agreement proceeds allocated to the purpose account, to enhance the security and repayment of loan agreement obligations, including increasing the level of periodic interest.

119. The system of claim 1, further comprising means coupled to the data bases including:

date determining means for determining, aided by said data processing means, that periodic computation, period ending, payment, and maturity dates have occurred or will occur within a preset number of days;

account beginning balance establishing means for electronically determining the balance at the end of the previous period(s) of the accounts used for the purpose of allocating the financial results of the borrower'"'"'s business activities identified to the loan agreement(s) and periodically determining its obligations to lenders and service providers;

rate setting means for determining and storing by data processing means the periodic external benchmark to be used to reset periodic interest of the loan agreement, the rate parameters for the period, and the conditions under which the borrower could reduce the periodic interest of the loan agreement to a level less than an amount determined by applying the external benchmark;

input determination means for electronically determining the inputs to the accounts for the current period(s) prior to calculation of periodic interest;

recalculation means for determining and electronically recalculating the periodic interest rate; and

account adjustment means for electronically determining the inputs to the accounts for the current period(s) after calculation of periodic interest.

120. The system of claim 1, further comprising means coupled to the data bases including:

payment establishing means for electronically determining payments to the lender, intermediaries, and service providers;

account transfer means for electronically allocating transfer amounts between the accounts established at issuance of the loan agreement;

account ending balance establishing means for determining and storing, through data processing means, the balance at the end of the current period(s) of the accounts used for the purpose of allocating the financial results of the borrower'"'"'s business activities identified to the loan agreement and periodically determining its obligations to lender and service providers; and

prepayment means for electronically determining if conditions exist during a period under which the borrower could partially or wholly prepay the loan agreement during its term, and means for partially or wholly prepaying such loan agreement.

121. The system of claim 1, further including means coupled to the data bases including data processing means comprising:

restriction means for determining through said data processing means, allocations of amounts identified to the loan agreement are being used by the borrower in the identified business activity(ies), consistent with the terms agreed, recorded and communicated at issuance of the loan agreement;

portfolio management means for periodically adjusting a portfolio of securities and creating and periodically updating an asset position list by said data processing means;

entering means for electronically recording, updating, and storing payment information, current rate information, interest and paying information and other loan agreement information and lender inquiries;

reporting means for generating detail and summary data on account balances and the status of the borrower'"'"'s assets and its contractual obligations to the lender, employing said data processing means;

account list means for recording, updating and storing an account list of current balance information for each loan agreement, account information and the accounts into which said issuing means has issued a loan agreement, employing said data processing means;

transaction and inquiry reporting means for electronically confirming individual transactions and responding to inquiries from customers; and

management reporting means for periodically generating a report employing said data processing means, including a summary of loan agreements issued, periodic interest allocations, payments, asset and liability position, and investment performance.

122. The system of claim 119 including data processing means coupled to the data bases, comprising:

means for electronically retrieving the previous period ending balance of the balance, payment, and purpose accounts;

means for determining, employing said data processing means, the external benchmark for the current period and other rate levels, which may include the maximum rate for the current period, the loan agreement maximum rate, and a loan agreement minimum rate;

means for electronically determining as of the periodic computation date, after distribution of required payments to the lender, the amount of loan agreement proceeds and accrued interest, if applicable, outstanding to the lender from the borrower, such amount being the balance on the periodic computation date of the balance account; and

means for determining, employing said data processing means, the amount of the periodic increase in assets allocated to the purpose account(s) to be recognized as attributable to the computational account in the respective period.

123. The system of claim 122, comprising electronic means coupled to said data bases for:

establishing a beginning periodic computational balance;

retrieving adjustment parameter data agreed by the borrower and lender at issuance of said loan agreement; and

determining the adjusted periodic balance of the computational account for determining periodic interest.

124. The system of claim 116, wherein said data processing means includes means for determining:

the amount of assets allocated to the payment account when compounded to payment date(s) required under the loan agreement using rates of interest accruing on such loan agreement is sufficient to meet all previously agreed terms of the loan agreement; and

if such assets are insufficient, a percentage as it relates to the balance account of the amount necessary to eliminate such shortfall.

125. The system of claim 119, wherein said data processing means including means for:

determining the formula rate by dividing the adjusted periodic balance of the computational account by the balance on the periodic computation date of the balance account, added to the minimum rate, if such rate is funded with assets allocated to the payment account and such payment account is not insufficient on the date of the periodic computation; and

comparing the formula rate to the external benchmark, and other rates which may include a minimum rate, a loan agreement maximum rate, and a maximum rate for the interest period.

126. The system of claim 120, further comprising data processing means for determining:

the amount to be allocated to the computational account if the formula rate is less than the external benchmark to permit the borrower to establish the interest crediting rate for a period subsequent to the interest period at the external benchmark;

whether sufficient such amount is available for transfer from the purpose account or from other assets or revenues of the borrower to the extent agreed at issuance of the loan agreement, and if not the amount otherwise available for such transfer;

the interest crediting rate at the external benchmark if the formula rate is below the external benchmark and sufficient assets are available for allocation to the computational account;

the interest crediting rate at a level below the external benchmark if assets allocated to the computational account are not sufficient to establish such rate at the external benchmark, such lower rate being determined by computing the percentage at which such available assets would be sufficient to fund interest for the subsequent period;

the interest crediting rate above the formula rate if such rate does not exceed any periodic maximum or loan agreement maximum rate, and in the event the formula rate does exceed such maximum rates, establishing the interest crediting rate for the subsequent period at the lower of such rates;

the present value of the subsequent period interest based on the newly established interest crediting rate;

the amount to be transferred from the computational account to the payment account; and

the amount of any remaining balance in the computational account to be transferred to one or more purpose accounts or as otherwise as provided in the loan agreement.

127. The wherein the means coupled to the data bases system of claim 120, comprising:

means for reducing the payment account by any payments made to lender; and

means for increasing the balance account by the accrual of interest based on the interest crediting rate.

128. The system of claim 121 wherein the data processing means includes means for electronically:

retrieving the prepayment parameters of the loan agreement;

monitoring and reporting changes in investments, interest rates, inflation rates, profits generated on assets identified to the financial instrument and other criteria and information parameters; and

determining the effects of changes in interest rates and account balances on the economics of the loan agreement and the appropriateness of prepaying the loan agreement.

129. The system of claim 128 wherein the data processing means includes means for determining:

a redemption value of assets set aside to assure payment of minimum loan agreement obligations, and the minimum requirement for loan agreement repayment prior to maturity; and

the cost to defease or repay said loan agreement liability based on the present value of assets identified to the loan agreement, data concerning investment yields, other costs, and

the time period to said payment date, which may include any minimum prepayment amounts.

130. The system of claim 128 he data processing means comprises:

means for electronically determining that the prepayment date is within periodic dates on which the borrower can elect to partially or wholly prepay the loan agreement.

131. The system of claim 1, further including data processing means coupled to the data bases comprising:

means to electronically create and store subaccounts and periodically allocate a portion of amounts allocated to said accounts to such subaccounts;

portfolio management means for selecting a portfolio of securities and creating and updating, an asset position list periodically, based on an amount of cash that is available for investment, current composition of the asset portfolio, projected cash need for the following period, projected interest liability schedule, and predefined portfolio selection criteria, in order to generate a stream of cash flows from the asset portfolio that will be sufficient to cover in full in a timely manner the loan agreement obligations;

means for inputting and storing the selected security purchase and sale transaction data to update the asset position list; and

payment and reporting means for sending said lender periodic payments, notices and status reports of the loan agreement.

75. A method employing operatively interconnected data processing and computing means for creating, servicing and paying loan agreements between a lender and borrower providing for repayment of the loan together with interest at a periodically adjusted rate based on the terms of the agreement, said method comprising the steps of:

inputting and storing the negotiated terms and conditions of a loan agreement with an identified lender into a system database which terms and conditions include at least a principal balance of the loan and the term, an initial period interest rate, compounding and interest rate crediting dates, terms for determining a formula interest rate applicable for a given period of time based at least in part on at least one publicly available external benchmark, and at least one of a life-time maximum interest rate, a maximum periodic interest rate, a life time minimum, a periodic minimum interest which rates can include a performance-based benchmark rate;

issuing the loan agreement with the agreed terms and conditions representing constraints by accessing such terms and conditions in said system database;

creating and storing in at least one further database a loan account for each loan agreement by accessing information input and stored in the system database;

computing, allocating and storing in at least one of said databases, initial balances relating to each loan account for at least a balance account, a payment account, a purpose account and a computational account;

obtaining and inputting said external benchmark into said system database;

computing from information in said system database the periodically adjustable interest rate for the next ensuing interest period as a function of the calculated formula interest rate based on said external benchmark and the constraints of the loan agreement;

periodically calculating and reallocating balances in the balance account between at least one of a number of accounts which include the payment account, each purpose account and the computational account based on the terms of each loan agreement stored in the at least one further database;

accessing said databases including monitoring and displaying each loan balance account based upon preestablished parameters governing the amount of the loan balance as derived from said databases;

inputting into at least one of said databases, expenses related to each loan account;

determining from information stored in said databases, the amount and date for payments to be made on each loan account based on information stored in said databases as governed by the terms and conditions of the loan agreement which optionally may include projecting the discounted value of the principal and minimum interest and comparing it with the present loan balance and determining and displaying whether to elect acceleration of the loan repayment as a function of said comparison and other information stored in said databases within constraining limits of the terms of the loan agreement; and

calculating and storing in at least one of said databases, the accreting balance of each loan account derived from information previously stored in databases.

76. The method of claim 75, comprising the steps of:

contract negotiation between the borrower and one or more lenders to negotiate, which may include the use of intermediaries and service providers, the terms of the loan agreement which terms provide for the level of interest thereon to be adjusted periodically to produce a rate of interest tied to the external benchmark, allowing the borrower to establish a lower rate of interest in any period in which its solvency or deteriorating credit quality, including with respect to the business activity to which the agreement relates, is otherwise threatened in exchange for establishment of a higher rate of interest during periods in which the results of a formula computation exceed certain pre-agreed levels;

identifying a particular business activity, agreeing, recording and communicating the terms under which funds received from the issuance of the loan agreement will be used by the borrower;

creating one or more accounts for the purpose of allocating the financial results of the borrower'"'"'s business activities identified to the loan agreement and initially establishing and periodically determining its obligations to the lender and service providers;

initially establishing the external benchmark used as a basis to reset periodic interest of the loan agreement, establishing periodic rate parameters, and initially establishing the conditions under which the borrower could reduce periodic interest of the loan agreement to a level less than an amount determined by applying the external benchmark;

determining the inputs based on such terms and conditions for recalculating the periodic interest;

determining, recording and storing at issuance of the Loan agreement the terms under which the borrower could partially or wholly prepay the loan agreement during its term;

recording and storing the agreement purchase, the agreement terms and conditions, payment information, current interest rate matrix, interest and paying information, acceleration notice provisions, and other agreement information and lender inquiries; and

issuing loan agreements which provide interest periodically determined by the borrower and accepting the agreement proceeds.

77. The method of claim 75, further comprising the steps of:

allocating loan agreement proceeds to various accounts established at issuance of the loan agreement, allocation of the borrower'"'"'s obligations to lenders to one or more accounts, and determining account balances at issuance of the the loan agreement;

selecting a portfolio of securities and/or application of agreement proceeds to other business purposes;

recording and storing an asset position list of current balance information concerning application of loan agreement proceeds;

generating detail and summary data on initial terms of the loan agreement and the initial status of the borrower'"'"'s assets and its contractual obligations to the lender; and

recording and storing an account list of current balance information for the loan agreement, account information and the accounts corresponding to the loan agreement.

78. The method of claim 76 comprising the steps of:

recording and storing proposed loan agreement terms, which may include the proposed date of transfer and amount to be tendered by prospective lenders to the borrower, the proposed amounts and dates of repayment by the borrower of such tendered amounts, the dates and method of determining payments of periodic interest to the lenders by the borrower, any restriction(s) on use of agreement proceeds, initial interest period and rate of interest, minimum rates of interest, maximum rates of interest, interest rate crediting parameters and formula computation methods, prepayment terms, and other proposed agreement terms; and

communicating such proposed agreement terms and other information between the borrower, prospective lenders, intermediaries and service providers.

79. The method of establishing the interest rates of claim 76, comprising the steps of establishing:

an initial interest period and an initial rate of interest for such period;

the external benchmark as the periodic interest rate on government securities of similar term as the loan agreement (remaining term government rate);

an adjustment factor including basis point adjustment to augment or diminish an externally determined periodic rate, said resultant periodic value being the external benchmark for the purposes of determining periodic interest under the loan agreement; and

inputs to and computational parameters of a formula which gauges the solvency and credit quality of the borrower'"'"'s periodic activities with respect to the business activities for which the agreement proceeds are dedicated.

80. The method of establishing the interest rates of claim 79, further comprising the steps of establishing:

a minimum periodic rate of interest;

a conditional maximum rate of interest during any specific period by way of augmenting the external benchmark by a pre-agreed number of basis points (one hundred basis points equalling one percent); and

a maximum rate of interest for all periods during the life of the loan agreement.

81. The method of establishing recalculation terms and conditions of claim 76, comprising the steps of:

recording and storing periodic dates for recalculation of interest; and

recording and storing a procedure for periodic interest rate recomputation;

allocating and determining revenues and assets of the borrower, if any, other than those assets identified to the loan agreement to which its contract proceeds are initially applied, to the establishment and payment of periodic interest.

82. The method of establishing prepayment terms and conditions of claim 76, comprising the steps of:

recording and storing periodic dates on which the borrower could elect to partially or wholly prepay the loan agreement;

recording and storing terms and conditions for periodic interest rate recomputation;

determining a minimum rate of periodic interest to be paid to the lender if the borrower wholly prepays the loan agreement prior to maturity, if applicable;

determining a portion of the loan agreement which may not be prepaid prior to maturity, if applicable.

83. The method of issuing the loan agreement of claim 76, further comprising the steps of:

establishing the amount and currency of the agreement proceeds transferred to the borrower, the maturity date of the loan agreement, the initial interest period, the rate of interest during the initial interest period, the currency in which the loan agreement is denominated, the agreement proceeds currency exchange rate if applicable, interest periods, dates and terms under which periodic interest will be accrued and paid, specific rate parameters and procedure for determining periodic interest, prepayment provisions, account drawdown provisions, payment procedures, and such other information as the borrower and lenders may agree;

issuing the loan agreement as any one of a debt obligation, an annuity contract, a guaranteed investment contract, a certificate of deposit, a note, a swap contract or other form of financial instrument; and

issuing the loan agreement where the borrower is any one of an insurance company, bank, single purpose corporation, individual, trust, mutual fund, investment company, partnership, limited partnership, or other incorporated or unincorporated entity.

84. The method of allocating assets at issuance of claim 77, comprising the steps of:

creating said balance account to which an initial balance is credited at issuance equal to the amount of the loan agreement proceeds;

creating said computational account to which an initial balance is credited at issuance equal to the amount of agreement proceeds;

creating said payment account to which amounts are periodically credited and payments to the lender are deducted therefrom;

allocating from the computational account at issuance of the loan agreement amounts payable to intermediaries and service providers;

allocating a portion of agreement proceeds to one or more of the payment accounts; and

allocating part or all of the loan agreement proceeds to one or more of the purpose accounts.

85. The method of allocating assets of claim 77, further comprising the steps of:

identifying, recording, storing and communicating the specific investments, investment activities, or other purposes for which a portion of the loan agreement proceeds are to be used, and the parameters under which the borrower will conduct such business activities;

establishing investment quality, currency and duration parameters for investment securities allocated to one or more of the payment accounts; and

restricting the use of profits generated from the investment of loan agreement proceeds allocated to the purpose accounts, to enhance the security and repayment of the loan agreement obligations, including increasing the level of periodic interest.

86. The method of creating the payment account of claim 84, further comprising the steps of:

determining the present value at issuance of the loan agreement proceeds to be repaid at maturity, based on current interest rates for investment securities; and

allocating investment securities to such payment account which are invested at such current market rates of interest and are sufficient at their respective maturities dates to repay the initial loan agreement proceeds.

87. The method of claim 86, further comprising the steps of:

determining the present value at issuance of the loan agreement of minimum periodic interest to be paid on one or more periodic interest payment dates in the future, based on current interest rates for investment securities matching such payment date(s); and

initially allocating investment securities to such payment account which are invested at predetermined rates of interest and are sufficient at their respective maturities dates to pay the minimum rate of periodic interest on the loan agreement on one or more periodic interest payment dates in the future.

88. The method of claim 75, further comprising the steps of:

entering, storing, updating and communicating external market rate data used to determine the periodic external benchmark; and

entering, storing, updating and communicating the results of periodic rate formula, and maximum annual interest rates.

89. The method of claim 75, further comprising the step of:

determining if conditions exist during a period under which the borrower could partially or wholly prepay the loan agreement during its term, and means for partially or wholly prepaying such loan agreement.

90. The method of claim 75, further comprises the steps of:

determining if the allocation of amounts identified to the loan agreement are being used by the borrower in the identified business activity (ies), consistent with the terms agreed, recorded and communicated at issuance of the loan agreement; and

periodically adjusting a portfolio of securities and creating and updating an asset position list periodically.

91. The method of claim 75, further comprises the steps of:

recording, updating, and storing payment information, current rate information, interest and paying information and other loan agreement information and lender inquiries;

generating detail and summary data on account balances and the status of the borrower'"'"'s assets and its contractual obligations to the lender; and

recording, updating and storing an account list of current balance information for each loan agreement, account information and the accounts for each loan agreement.

92. The method of claim 75, comprising the steps of:

confirming individual transactions and responding to inquiries from customers;

periodically generating a report including a summary of loan agreements issued, periodic interest allocations, payments, asset and liability position, and investment performance.

93. The method of claim 75, further comprising the steps of:

retrieving a previous period ending balance of the balance, payment, and purpose accounts prior to a given period;

determining the external benchmark for the previous period and other rate levels, which may include the maximum rate for the previous period, the loan agreement maximum rate, and a loan agreement minimum rate;

determining as of a periodic computation date, after distribution of required payments to a lender, the amount of loan agreement proceeds and accrued interest, if applicable, outstanding to the lender from the borrower, such amount being the balance on the periodic computation date of the balance account;

determining the amount of the periodic increase in assets allocated to the purpose account(s) to be recognized as attributable to the computational account in the respective period.

94. The method of claim 75, comprising the steps of:

establishing a beginning periodic computational balance;

retrieving adjustment parameter data agreed at issuance of the loan agreement; and

determining an adjusted periodic balance of the computational account to be used in determining periodic interest.

95. The method of claim 75, further comprising the steps of:

determining the amount of assets allocated to the payment account when compounded to payment date(s) required under the loan agreement using rates of interest accruing on such instrument and determining if the amount is sufficient to meet all previously agreed terms of the loan agreement; and

determining, if such assets are insufficient, a percentage as it relates to the balance account of the amount necessary to eliminate such shortfall.

96. The method of claim 75, further comprising the steps of:

dividing the adjusted periodic balance of the computational account by the balance on the periodic computation date of the balance account, added to the minimum rate, if such rate is funded with assets allocated to the payment account and such payment account is not insufficient on the date of the periodic computation, said result being the formula rate; and

comparing the formula rate to the external benchmark, and other rates which may include a minimum rate, a loan agreement maximum rate, and a maximum rate for the period.

97. The method of claim 75, further comprising the steps of determining:

the amount to be allocated to the computational account if the formula rate is less than the external benchmark to permit the borrower to establish the interest crediting rate for the subsequent period at the external benchmark; and

whether sufficient such amount is available for transfer from purpose accounts or from other assets or revenues of the borrower to the extent agreed at issuance of the loan agreement, and, if not, the amount otherwise available for such transfer.

98. The method of claim 75, further comprising the steps of establishing the interest crediting rate:

at the external benchmark if the formula rate is below the external benchmark and sufficient assets are available for allocation to the computational account;

at a level below the external benchmark if assets allocated to the computational account are not sufficient to establish such rate at the external benchmark, such lower rate being determined by computing the percentage at which such available assets would be sufficient to fund interest for the subsequent period; and

above the formula rate if such rate does not exceed any periodic maximum or loan agreement maximum rate, and in the event the formula rate does exceed such maximum rates, establishing the interest crediting rate for the subsequent period at the lower of such rates.

99. The method of claim 75, further comprising the steps of:

determining the present value of a subsequent period interest based on the newly established interest crediting rate;

transferring such amount from the computational account to the payment account; and

transferring any remaining balance in the computational account to one or more purpose accounts or as otherwise as provided in the loan agreement.

100. The method of claim 75, further comprising the steps of:

reducing the payment account by any payments made to the lender; and

increasing the balance account by the accrual of interest based on the interest crediting rate.

101. The method of claim 89, further comprising the steps of:

retrieving the prepayment parameters of the loan agreement;

monitoring and reporting changes in investments, interest rates, inflation rates, profits generated on assets identified to the financial instrument and other criteria and information parameters;

determining the effects of changes in interest rates and account balances on the economics of the loan agreement and the appropriateness of prepaying the loan agreement;

establishing a redemption value of assets set aside to assure payment of minimum loan agreement obligations, and the minimum requirement for loan agreement repayment prior to maturity;

determining the cost to defease or repay the loan agreement liability based on the present value of assets identified to the loan agreement, data concerning investment yields, other costs, and the time period to said payment date, which may include any minimum prepayment amounts; and

determining that the prepayment date is within periodic dates on which the borrower can elect to partially or wholly prepay the loan agreement.

102. The method of claim 75, further comprising the steps of:

creating subaccounts and periodically allocate a portion of amounts allocated to accounts to such subaccounts;

selecting portfolio of securities and creating and updating an asset position list periodically, based on an amount of cash that is available for investment, current composition of the asset portfolio, projected cash need for the following period, projected interest liability schedule, and predefined portfolio selection criteria, in order to generate a stream of cash flows from the asset portfolio that will be sufficient to cover in full in a timely manner the loan agreement obligations;

recording the selected security purchase and sale transaction data to update the asset position list; and

sending lenders periodic payments, notices and status reports of their loan agreements.

103. The method of claim 75, comprising the steps of:

identifying a particular business activity and agreeing the terms under which funds received from the issuance of the loan agreement will be used by the borrower; and

negotiating between a borrower and one or more lenders, the terms of the loan agreement which provide for the level of interest thereon to be adjusted periodically to produce a rate of interest tied to the external benchmark, allowing the paying entity to establish a lower rate of interest in any period in which its solvency or deteriorating credit quality is otherwise threatened in exchange for establishment of a higher rate of interest during periods in which the results of a formula computation exceed certain pre-agreed levels.

104. The method of claim 75, comprising the steps of the borrower creating one or more accounts for the purpose of:

allocating the financial results of its business activities identified to the loan agreement(s); and

initially establishing and periodically determining its obligations to lenders and service providers.

105. The method of claim 75, further comprising the steps of initially establishing:

the external benchmark used to establish periodic interest of the loan agreement, as well as periodic updating; and

the conditions under which the borrower could reduce periodic interest of the loan agreement to a level less than an amount determined by applying the external benchmark.

106. The method of claim 75, further comprising the step of:

the borrower periodically establishing the level of interest of the loan agreement to the lenders for each respective period.

107. The method of claim 75, further comprising the step of:

agreeing to the terms under which the could partially or wholly prepay the loan agreement; and

determining in a given period that conditions exist which permit the borrower to partially or completely prepay the loan agreement.

108. The method of claim 75, comprising the steps of:

selecting a portfolio of securities and/or application of loan agreement proceeds to other business purposes, and creating and periodically updating asset allocation accounts; and

generating detail and summary data on the current status of the borrower'"'"'s assets and its contractual obligations to the lender.

132. A loan agreement produced by the practice of the method of claim 75.

133. A loan agreement produced by the practice of the method of claim 76.

134. A loan agreement produced by the practice of the method of claim 89.

135. A loan agreement produced by the practice of the method of claim 101.

114. The system 7 including data processing means coupled to the data bases, comprising:

means for electronically recording and storing periodic dates on which the borrower could elect to partially or wholly prepay the loan agreement;

means for electronically recording and storing terms and conditions for periodic rate recomputation;

means for determining, by said data processing means, a minimum rate of periodic interest to be paid to the lender if the borrower wholly prepays the loan agreement prior to maturity, if applicable; and

means for determining, by said data processing means, a portion of the loan agreement which may not be prepaid prior to maturity, if applicable.