1.

Explain the features of Bank Loan? Explain why secured loans are safer for the Banks?

Answer»

Features of Bank Loans: Bank loans have the following characteristics: 

  • A bank loan may be either secured or unsecured depending upon the circumstances. 
  • The interest charged by the bank on such a loan may be either fixed rate or at variable rate. 
  • If mortgage loan is to be obtained, the borrower has to pay a number of fees such as title searching fees, application fees, inspection fees, etc. 

In the event the borrower fails to repay the loan with interest, the bank will be able to liquidate the security (after giving sufficient notice to the borrower) and appropriate the proceeds towards the dues of the borrower. If the sale proceeds of the securities exceed the dues of the borrower, the excess amount is given back to the borrower.



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