Many people take a loan from a bank if necessary. The loan is one of the main activities of the bank. The way to get a bank loan is a desirable thing for many. Bank loans benefit both the loan customer and the bank. Before taking a bank loan, you should know the important things about the loan.
However, many people in our country can not take a loan because they do not know the way or rules to get a bank loan. Let’s find out what is a bank loan, the types of bank loans and how to get a bank loan.
What is a bank loan?
Loan means borrowing or borrowing, it is known to all of us. If necessary, we borrow money or other things from family, friends, or relatives. It is even possible to take mobile balances and loans. You can also take MB or an internet data loan on mobile. This loan has to be repaid from the account balance later. In the case of banks, the issue of loans is very similar.
When a bank lends money to a customer for a certain period of time, that money is considered as a bank loan. However, the condition is that along with the repayment of the loan, interest is to be paid to the bank by the customer at a fixed rate monthly or annually.
Types of bank loans
- Bank loans can be divided into three parts on the basis of terms. E.g.
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Short Term Loans: Short-term loans are usually for 1 to 2 years. Short-term loans are mainly for business needs. Higher interest rates apply to these loans. Weekly repayments can also be availed if the loan period is very short.
Medium Term Loan: Medium-term loan is basically for 2 to 5 years. It can be called a loan between short-term and medium-term loans.
Long Term Loan: Long term loan is for a period of more than 5 years. Most long-term loans are secured.
How many types of bank loans.
Ways to get a bank loan
In addition to the above types, bank loans can be further divided into different types. Because there are different types of bank loans, for example
- Personal Loans: Loans for personal use
- Business Loans: Loans for doing business or for business purposes
- Home Loans: Loans for buying or building a home
- Auto loan: car loan
- SME Loans: Loans for small and medium-sized businesses
- Education / Student Loan: Loan for the purpose of education
- Expatriate loan: Loan for going abroad
- Agricultural loan: Loan for agricultural work
- Quick loan: Emergency loan
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Reasons why banks give loans
If you want to take a loan from a bank, it is mandatory to show the reason for taking a loan. The reasons for giving some significant loans are:
- For personal use
- Building a house
- To buy a car
- For treatment
- To study
- For trade and commerce
- For agriculture
- To go abroad
- Immediate help in disaster or danger
- Banks that give loans
We already know that lending is one of the main tasks of a bank. Many banks in Bangladesh provide almost all types of loans. However, the interest rate and monthly installments of each bank are different. So before taking a loan, you must know the interest rate and monthly installment of the bank from which you are taking a loan.
In case of giving a loan, the bank will provide some conditions, that are normal. You can apply for a loan only if you meet the conditions set by the bank. In the case of a loan, the bank will want to know
Why the loan is being taken.
- Credit history
- Personal information
- Job or business experience
- The customer plans to use the loan money
- Financial statement
- Cash flow statement
- Previous Loan Information (if any)
- Documents required to get a bank loan
- The same type of paperwork is required for most bank loans. Here are the possible documents to get a bank loan:
- Properly filled application form with signature
- Recently taken pictures
- Photocopy of National Identity Card / Driving License / Passport
- Office ID photocopy
- Salary certificate
- Copy of any utility bill
- Trade license
- Copy of income tax return
- Checkbook page
- Bank statement
In the case of taking a loan, a guarantor has to be added on behalf of the borrower. Guarantor’s photo, NID, office ID, etc. documents are required. If the borrower fails to repay the loan, the guarantor has to answer the bank. Witness will also be required.
Note that the required documents may vary depending on the loan you take. Usually, the bank informs you what documents are required to get the loan.
Application for a bank loan
Once the paperwork and applicable conditions have been completed, you will need to apply for a bank loan. In the case of a loan application, the application form has to be filled by providing proper information, such as reasons for taking a loan, the amount of loan, etc. This application form will be given by the bank.
If you apply by filling out the form, the bank may call you for an interview, where you will be asked for details about the loan information. After that verification will be done from the bank. After verification, you will get your loan money in the bank account as soon as possible.
Things to keep in mind before taking out a loan
If necessary, there is no obstacle to taking a loan from a bank. However, there are some things to keep in mind when taking out a loan. E.g. The amount of loan repayment is determined on the basis of credit score. So it is better to know the credit score when taking a loan. Before taking a loan from a bank, you must know the details of the bank from which you are taking a loan, the interest rate of the bank, the term of the loan, the monthly installment, etc. Learn about the processing charges applied to the loan process. In case of late repayment of the loan, usually, a 5 to 10 percent late payment charge is applicable. So don’t forget to know about late payment charges before taking a loan. A certain amount can be accepted as a prepayment charge before taking a loan, which is very important to know. Ways to take a BKash loan Citibank and BKash loan without collateral!
Benefits of bank loan
There are many benefits to taking a loan from a bank. E.g.