Loans

A Loan Is A Type Of Debt. In a simple way it is an agreement in which a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the money, usually along with interest. Legally, A Loan Is A Contractual Promise Of A Debtor To Repay A Sum Of Money In Exchange For The Promise Of A Creditor To Give Another Sum Of Money.

Type of loans: Generally Loans are of two types:

1 Secured: A secured loan is a loan in which the borrower pledges some asset (e.g. purchase a house or a car is a example of secured loan).

For example: mortgage loan is a very common type of debt instrument, used to purchase housing. By this arrangement, the money is used to purchase the property. The financial institution, however, is given security - a lien on the title to the house - until the mortgage is paid off in full. If the borrower defaults means unable to pay the loan, the bank would have the legal right to recapture the house and put up for sale it, to recover sums remaining to it.

2 Un-Secured: Unsecured loans are monetary loans that are not secured against the borrowers assets. These may be available from financial institutions under many different guises or marketing packages such as :

· Credit card debt,
· Personal loans,
· Bank overdrafts
· Credit facilities or lines of credit
· Corporate bonds

The interest rates applicable to these different forms may vary depending on the borrower. These may or may not be regulated by law.

Type Of Loan:

· Home Loans
· Personal Loans
· Car Loans
· Business Installment Loans
· Commercial Vehicle Loans
· Two Wheeler Loans