In the article you will find some basic information on Bank Loans. In the present days we all agree to the fact that money is the need of the hour but in previous times the need was comparatively less. The activity of taking bank loan was not prevalent as the people were individual earners instead people preferred taking loan from the money lenders whenever in need of money.
The drawback in this case was the self employed nature of the borrowers as they were not responsible to anybody for their acts. Getting loans from back in previous times was extremely tough for an individual. The thinking of the people that such loans would restrict their freedom in using their funds also restricted them from taking such bank loans.
Before finally availing payday loans or any other type of loan, it is of paramount importance that you know the nature and dynamics of loans for having these pieces of information in mind would greatly help you deal with your finances effectively. More than this, it would also aid you as you strategics for your financial life. On this site, you would read a number of articles about bank loans—from the process of getting loans to different modes of payment and even to interest rates.
Even now for newly wage earner not having a stable income in the preceding year or two, finds it really difficult to obtain loan from the bank. Hence the utmost important thing in
lending loan from the banks point of view is surety, regular income of the borrower and as a result customer fails to procure the loan due to failure to fulfill these conditions of the bank but if the entrepreneur is running his business successfully over a period of time , banks in this case consider such borrowers and are must enthusiastic in providing a reasonable deal after confirming the financial worth with the person interested in taking the loan.
Under the concept of being employed, the views are such that the self employed serves with lower security as compared with a sound and esteemed company. But now with the changes this mentality of the people has also changed. The previous year’s fact that the person worked in the same company through out his life in the same company and retired guaranteeing a fixed amount as pension for himself no longer exists.
As the economy is changing and growing at a very fast pace, thus the employment scenario in the country is also changing and developing at a very fast pace. The entrepreneurs, innovators are opening up their own business houses as one can achieve more with application of new ideas given personally by them. Hence even they are also able to get the same opportunity from banks as previously an employed worker used to get. One can easily secure a loan by mortgaging his personal assets.
As more profitable individual businesses has come up as they see a lot of advantage in setting up of such businesses and the private sector is offering a high comprehension, in such situation such self employed segment are proving to be a boom to the economy to a large extent.
Following this the bank loans are also getting interested in attracting such customers by offering lower rates of interest to the customers. All this has lead a wide spread increase in the competition through out the economy which proves to be beneficial for self-employed people struggling to get loan. All this would make it easy for the self employed to secure funds as loan.
What are bank loans?
Banks were primarily considered a place where the public could store the money for the surety of their future needs. The early idea emerged with the concept that an individual can deposit his savings in the banks and earn interest on such savings. But today deposits and loans are two sides of the same coin for all the banks.
If one whishes to acquire property, invest money in a project or buy personal assets, he generally approaches banks for loans, to fulfill their financial needs as very few are born as rich, so everyone depends on banks accomplish their goals. Banks offer different kinds of loans to their customers and the customers benefit from them. Therefore banks have become a necessary requirement in today life. The customer repays the acquired loan along the interest thereon.
People borrow loans for the contribution of their homes and mortgage which may be in the form of auto loan, business loan, construction loan etc. These days’ loans are offered by the banks for any kind of work. Students loans are offered to provide them financial support for higher studies and the students can repay such loans whenever feasible to so that is after they start to earn a fixed income. . Then we also give loans enabling the customers to buy property like cars, consumer goods like refrigerator etc. All these loans have different terms and conditions at different rate of interest repayment procedure.
Credit cards are also a type of loans which are paid in installments. Some loans are even given to repay the previous loans; the reason may be a higher rate of interest on previous loans. Home loans are the most common loans availed from banks these days by the people which are just like a credit and are given by banks against some security. Even in the big business world, all the big business houses are growing with the support of such banking system.
Thus financial lending activities promote the business in the country. The borrowers repay such loan on the basis of monthly, quarterly or yearly installments which reduces the burden of consumers and reduces stress and therefore the principal amount is repaid easily. Banks these days solve a multitalented purpose as they provide loans for nearly anything.
Banks play a vital role in providing business loans for the purpose of housing activities. However the loans provided by the banks for the purpose of business activities are much more in comparison to the home loans. It can be said that most business houses are run by the banks or that businesses exist only because of the financial support of the banks all sort of businesses whether it may be small scale business or a large scale business depends on the banks for financial support for fulfilling their objectives.