What is a portfolio loan?
A portfolio loan is a loan that is serviced by the lender that issued the money. In many cases, loans that are issued by a lender are packaged together with other loans and sold in the secondary market. With a portfolio loan, the lender that initially wrote the loan is going to hang onto it and keep it as part of their investment portfolio.
If a lender keeps your loan as part of their portfolio, it can benefit you overall. Instead of having to work with a lender that is going to service your loan from another location, you will be able to keep your relationship with the lender that you originally worked with. By doing this, you will be able to contact them whenever you have a problem. Your customer service experience should improve.
Typically, those that have a good credit score and are considered to be a good credit risk are those that are considered to be eligible part of a portfolio. Lenders like to keep those that have a good credit history on hand because it lowers the amount of risk in the portfolio.