Loan is a form of debt that has diverse impact in the world of economics. There are financial institutional, banks, person who act generally both as lender and borrower in loan process. The borrower needs to repay the loan to lender within a certain period agreed prior to sanctioning of the loan.
In present day one of the most important type of loan is bank loan. It is an extension of credit by a bank where lender provides loan for specified purpose to a personal or business and borrower commits to repay the loan in a specified time with a certain interest rate agreed during loan sanction. Often the bank loan is provided as a mortgage loan for purchasing of home or car. The bank loan is advantageous in many ways. It is easy to procure, can be used for short term as well as medium term financing, the interest paid are tax deductible expenditure and mostly it is considered as secure loan. However, it carries certain disadvantages as it requires title searching fee, inspection charges, application fees to be borne by the borrower when applied for mortgage type bank loan, the approval time is longer after submission of application, often bank disburse lower amount than it actually requires.
The loan with money in minutes is becoming quite popular. This kind of loan is taken for short term purpose when person is running short of cash and is also known as short term loans.
Some loans are approved quickly and disbursed immediately. Such kind of loan is also known as same day cash loan. Often it is sanctioned as pre-approved loan against the credit card. Now a day’s payday loan for bad credit is available which makes the cash easily available to borrower but at a very high interest rate. This kind of loan often gives quick relief to those who are looking for instant cash, requires no processing time and provide mostly the amount it is demanded. However, the interest rate is pretty high. The risk of repayment is there as the rate of interest often rises high and lender often loses money when borrower becomes defaulter.