Explain the methods of granting loan by bank.

1 year ago
Banking

The loan can be granted as:

(a) Demand loan,

(b) Term loan.

(a) Demand Loan:

Demand loan is repayable on demand. The entire amount of demand loan is disbursed at one time and the borrower has to pay interest on it. The borrower can repay the loan either in lumpsum or as agreed with the bank.

(b) Term Loans:

Medium and long term loans are called, Term loans’. Term loans are granted for more than one year and repayment of such loans is spread over a longer period The repayment is generally made in suitable instalments of fixed amount. These loans are repayable over a period of 5 years and maximum upto 15 years.

Susmita Sah
Jan 16, 2022
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