Loan is the process of lending something to an individual/group of individuals, entity or an organization at a specific rate of interest and a promissory note which specifies the principal amount/thing borrowed, the interest rate and the duration of loan. Loans are an essential instrument for finance. Many financial institutions offer secured loans to gain interest; thus, loans benefit all the stakeholders.
It doesn’t always mean that financial institutions have to give loans to individuals or groups of individuals. We also have a “rich uncle” phenomenon. We often see others acquiring instant loans from friends and family where the terms of loans are much more flexible.
In the 21st century, where urbanization is occurring at a rapid rate, many business organizations and individuals make the most out of it. Businesses look to expand their current operations and individuals might look for better homes, better cars and what not. You might face problems sometimes to save money even though you have a stable source of income. This is why we need the financial institutions to help us out with loans. Both parties benefit from this as the debtors can get their job done and creditors can have a secured return.
WHY ARE LOANS A FINANCIAL NECESSITY
Flexibility
When we acquire instant loans from financial institutions, we can choose the mode and method of repayment by virtue of a number of EMI schemes. These installment payments help you to get your job done and return the amount to the institution in a flexible manner.
Fixed interests
Loans that are taken from financial institutions have a fixed rate of interest imposed on them. Therefore the debtor is aware of the installments that they need to pay and keep aside the funds for repayment. There is no fluctuation of interest rates.
Tax benefits
Bank loans are a tax deductable expense. Therefore if any entity or individual has a bank loan, they need to pay fewer taxes.
A sense of security
The financial institutions who give loans may ask for some collateral against the loan amount. This is because if you fail to pay the full amount, the bank retains the security against the unpaid amount. The applicants of loans also know that the loans that they are acquiring are from a reliable source which will benefit them.
TYPES OF LOANS
Student loans
Mortgage loans
Auto loans
Personal loans
Business loans
Pay day loans
Consolidated loans
Cash advances
It doesn’t always mean that financial institutions have to give loans to individuals or groups of individuals. We also have a “rich uncle” phenomenon. We often see others acquiring instant loans from friends and family where the terms of loans are much more flexible.
In the 21st century, where urbanization is occurring at a rapid rate, many business organizations and individuals make the most out of it. Businesses look to expand their current operations and individuals might look for better homes, better cars and what not. You might face problems sometimes to save money even though you have a stable source of income. This is why we need the financial institutions to help us out with loans. Both parties benefit from this as the debtors can get their job done and creditors can have a secured return.
WHY ARE LOANS A FINANCIAL NECESSITY
Flexibility
When we acquire instant loans from financial institutions, we can choose the mode and method of repayment by virtue of a number of EMI schemes. These installment payments help you to get your job done and return the amount to the institution in a flexible manner.
Fixed interests
Loans that are taken from financial institutions have a fixed rate of interest imposed on them. Therefore the debtor is aware of the installments that they need to pay and keep aside the funds for repayment. There is no fluctuation of interest rates.
Tax benefits
Bank loans are a tax deductable expense. Therefore if any entity or individual has a bank loan, they need to pay fewer taxes.
A sense of security
The financial institutions who give loans may ask for some collateral against the loan amount. This is because if you fail to pay the full amount, the bank retains the security against the unpaid amount. The applicants of loans also know that the loans that they are acquiring are from a reliable source which will benefit them.
TYPES OF LOANS
Student loans
Mortgage loans
Auto loans
Personal loans
Business loans
Pay day loans
Consolidated loans
Cash advances
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