GK on Loan Definition, Types of Loans and Brief Information about Loans.
Definition of Loan | Important Notes |
Questions and Descriptions:
What is the right definition of Loan?
Loan is the business of money by one or more person/entities to other persons/entities in the term of Finance subject.
Who provides the Loans?
Basically Loans are provided by banks and credit card companies. Countries also provides loans to another countries as per the agreements, purpose and duration of loans.
What are the types of Loans?
There are five types of Loans: Demand Loans, Subsidized Loans, Concessional Loans, Secured Loans and Unsecured Loans.
What is the Demand Loans?
Demand Loans can be define as short terms loans and these can be secure and unsecured loans as per agreements between the lender and the borrower. Also these loans do not have fixed dates for repayments. Demand Loans have floating interest rates.
What is the Subsidized Loans?
Subsidized Loans are refers as which don’t have interest on loan amount. Education College loans comes under the Subsidized Loans.
What is the Concessional Loans?
Many developed or foreign countries governments provides loans to the developing countries and these comes under the Concessional Loans. These loans have below-market interest rates and lander can give grace periods under this loan.
What is the Secured Loans?
Mortgage Loans (Home Loans) basically comes under the Secured Loans because under the agreements of the secured loans the lander have legal right to repossess the home and sell it to recover the loans. Mortgage Loans are taken by many individuals to purchase the residential properties.
What is the Unsecured Loans?
Credit Card Loans, Personal Loans, Lines of Credit Loans and corporate bonds comes under the Unsecured Loans. These loans are not secured against the borrower’s assets. Unsecured Loans may or may not be regulated by the Law of country.
(Note: Above article is based on the information provide on Wikipedia Article.)
Also Read Our Important Articles: