You are on page 1of 18

A PRESENTATION ON BANKING LOANS

ACKNOWLEDGEMENT
We are thankful to our faculty MOHAN IYER for giving us such a great topic of BANKING LAONS as our project and helping us to gain knowledge about it which is helpful in our near future.

INTRODUCTION:
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.
In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time.

WHAT IS BANK LOAN?


Banking loans refers to the different types of banking loans offered by banks. Banking loans may be availed of for various purposes. Banking loans are governed by banking laws and banking regulations.

Banking loans rate of interest:


Banking loans are availed of by paying a particular rate of interest. The rate of interest of the banking loans may be either fixed or the rate of interest may be variable or adjustable.

Factors affecting rate of interest of banking loans:


Inflation: Economic Condition

Term Period

PRINCIPLES TO BE FOLLOWED FOR GIVING BANK LOANS:


Safety:

Liquidity:

Profitability :
The bank earns profit in the form of interest which are payable to deposit holders and for declaring dividends to shareholders. They also need money for operating expenses.

Types
1.Secured
Secured banking loans are availed in exchange for a security or collateral. The banking loans provider offers banking loans to an individual provided the banking loan borrowers give something as security. In the event when the banking loans borrower is unable to pay back the loan amount, the banking loans lender has the authority to confiscate the security. Security may be ones property or some asset.

2.Unsecured
Unsecured banking loans are the banking loans which do not require any security. There are hardly any banking loans provider wishing to offer unsecured banking loans to individuals intending to begin a new business. The reason being the banking loans provider or the banking loans company is not aware of the credit history of the banking loans borrower and is not intending to any risk.

Demand
Demand loans are short term loans that are atypical in that they do not have fixed dates for repayment and carry a floating interest rate which varies according to the prime rate. They can be "called" for repayment by the lending institution at any time. Demand loans may be unsecured or secured.

Target markets
Personal or commercial Loans can also be subcategorized according to whether the debtor is an individual person (consumer) or a business.

Loan payment

Monthly payment of loan is done by adding the rate upon 1 + the rate raised to the no of months subtracting 1 multiplied by the principal amount.

Abuses in lending

Predatory lending is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her USURY is a different form of abuse, where the lender charges excessive interest. In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates.

Income from discharge of indebtedness


Although a loan does not start out as income to the borrower, it becomes income to the borrower if the borrower is discharged of indebtness.

Example: X owes Y $50,000. If Y discharges the indebtedness, then X no longer owes Y $50,000. For purposes of calculating income, this should be treated the same way as if Y gave X $50,000.

Conclusion
An individual can avail of bank loan to own any loan. An individual can avail of bank loan to own anything under the sun. Bank loans make it possible for an individual to own a house, own a vehicle, repair one's house. In One can opt for a wide range of loans from a bank. Bank loans have become much easier due to the latest technologies which are made use of these days.

PROJECT REPRESENTATIVES:
NAME RIDDHI KARAN ALTAF NIKITA NATASHA SANAM ROLL NO. 9 19 29 39 49 59