Type Of Loan

Loan is the process of lending of money from one party to another. Either party can be individual, business, financial group or more. The party who takes the loan is called as borrower and the other party who gives the loan, known as lender. It is absolutely an obligation, responsibility on the receiving party, known as Debt. Banks gives the loan on the same pattern. In financial market, loan is given on some conditions and usually on profit. Lender enjoys the profit on his money if the loan is not provided in friendly manner. Business Loans or Corporate Debts are provided with some interests in which Banks can also be made guarantee for security.

In a fair business, interest rate on the loan is, determined by market forces or financial institutes, governed by governments. Unfair means is also using while giving the loan to people, in which excessive interest rates are charged. Interest rate is defined as cost of money which is provided as loan to party who borrows.

Loan has two major types which are in practice too. First one is the secure type in which borrower, pledges some assets like house, building, car etc. Second is mortgage loan, which is used by buy real estate buyers or personal property buyers to raise funds. Read More about Debt Recovery Dubai