Bank Loan/Investment:
Bank loan is an amount of money/fund provided by bank (the lender) to borrower for personal needs meet up or business purpose for short, medium or long-term basis usually taking personal guarantee, or collateral security or mortgage or other means that secure the money/fund/loan.
Generally, Bank's provided funds have to return/given back by the borrower with loan principal amount plus interest and other charges per month, or per year basis. Bank loan has different forms such as secured, unsecured, revolving, term loan, commercial, and personal loans.
Bank Loan Types:
* Secured Loan: that takes collateral security (the assets that pledged as security for loan) or mortgage (e.g. property/land/building/heavy machinery) from borrower.
* Unsecured Loan: which does not take security as like Secured Loan. Such loan provided by bank to borrower on the basis of borrower's income/salary sheet/service category/profession etc. Unsecured Loan are - Credit cards, Personal loans, Bank overdrafts, etc.
* Revolving Loan: which revolves, that is a form of credit facilities provided by bank to borrower that the borrower will consume the credit limit then pay back and again withdraw and such transaction continuous that is borrow from the credit limit and repay repeatedly. For such credit facilities borrower has to pay interest and other service charges. Credit card is one of the finest examples of Revolving Loan.
* Term Loan: also called demand loan, provided for business purpose for specified time schedule, usually paid back with an agreed repayment schedule over a set period of time.
* Commercial Loan: also called business loan, which is designed and intended for business purposes or business expenses. It is borrowed and will be repaid with added interest.
* Personal Loan: the loan is designed and intended for personal needs meet up, have to pay back with interest. It is generally designed for short term purpose. Such loan provided by bank to borrower on the basis of borrower's income, salary sheet, service category, profession etc.
Published Date: 08/07/2023
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