# Servicing and Collections Glossary

> 2 terms from the Banking & Lending book's Servicing and Collections part, each defined in a line and linked to the chapter that explains it.

- **Charge-off:** removing a loan the lender doesn't expect to collect from its books against the allowance, with any later collections booked as recoveries ([The Banking & Lending Business](https://www.syntaqx.com/books/banking-and-lending/banking-business#credit-losses)).
- **Payment allocation:** how one loan payment was applied to fees, interest, principal and escrow under the rule in force that day, stored rather than recomputed ([The Banking & Lending Business](https://www.syntaqx.com/books/banking-and-lending/banking-business#the-life-of-a-loan)).

---

Canonical URL: https://www.syntaqx.com/books/banking-and-lending/glossary/servicing-and-collections