In our life, we have many dreams, many goals to achieve. Money makes this possible to fulfill our dreams into reality. We need to support our family efficiently. For this, we need money. But we do not have a pocket full of money all the time. An empty pocket becomes a barrier to make things possible. But should we stop dreaming for that reason? The answer is no, as long as we have a stable earning, we can have an option of taking Loans.
We cannot always take up decisions those are based on what the bankers want to sell. That is why a wise decision of taking loans from a safe zone always seems to be good. Make sure that your earned money from your hard work never goes in vain. So opt for a health policy and please do a homework before you go for any contract agreement.
This article is for you to make it easier for you as a view get before you take any kind of loans. The calculation for interest is not a rocket science. But this is a very complicating calculation that may deceive you. Always try to understand the price-feature tool of interests. For any specified scenario, always take a wise decision to find the best deal for you. There certainly lies a risk factor about to cover up the huge amount of loan plus interest you have to compensate in future. So be careful. Here are some basic questions before you sign a contract-
- What is the total amount of money you have covered up?
- How should you choose a suitable loan policy?
- What are best deals you can find from that bank you opt for?
- What are the steps you would need to take about the risks you may face later?
- How much amount and what type of loans you are eligible for?
- Which banks give you the lowest rates?
- How can you get your loan fast?
The type of loans you can have:
- Home loans
- Car loans
- Personal loans
- Commercial loans
- Loans against security
- Business loans
The types of loans on the basis of the lender’s point of view
Secured loan – the borrower can get the loan with collateral (that is a car or house or land or property). Example: Mortgage loan.
Unsecured – this does not include any collateral, available from the financial guises or business packages. Example: Personal loans, credit card debt, bank overdraft etc.
Demand – a type of short time loan, no fixed date of repayment and a floating interest applied over it. Example: commercial loans.
Subsidized loan – a type of loan where interest is reduced, a hidden or on explicit subsidy is applied on the interest.
What are the advantages of taking out a bank loan?
When one is looking for funding for his project, there are a plethora of possibilities to obtain a certain fund, for example, the loan to pledge, the loan between individuals, microcredit, the aid of CAF, the sale of its real estate or appliances, a sale of its furniture etc. But each of these solutions mentioned above also has their disadvantages and their strengths. With regard to bank credit, they allow for a greater volume of financing compared to these other solutions.
For companies especially, this means of obtaining cash is significant because it allows obtaining cash, buying equipment or real estate business, and buying the goodwill or the social part of the company from another shareholder, or take over the company. In addition, when a manager contracts a bank loan for his business, he cannot be removed from the decision-making power in his structure. In addition, there is a possibility of tax deductibility of interest on bank credits. For individuals, offers of consumer credit have the advantage of being easy to access.
In addition, some consumer loans offer fixed interest rates and a constant monthly payment. The borrower can easily dispose of the property he has coveted even if he has no money to pay the property for cash. For example, he can buy a car or a house he has always dreamed of if the bank considers that he has the necessary conditions to obtain credit. The personal loan also allows him to cover his finances if he still has accounts short or if he runs out of cash. Instead of filling your piggy bank for 15 years or saving for 25 years, you can quickly buy a property.
Moreover, those who are caught in the throat with the repayment of several credits can opt for the restructuring of bank debts. This solution also helps to lighten its finances by extending its monthly payments over time and consolidating its loans into one. For the banking institution, for its part, this type of financing is a financial windfall. Banks reap their profits via this means. This solution also helps to lighten its finances by extending its monthly payments over time and consolidating its loans into one.
Bank loans are useful for all those who have an urgent need for the acquisition of goods or materials and who can repay the amount borrowed. But if we do not have the capacity to repay the fund, it is better not to do any type of financing, as this could lead to over-indebtedness.