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| What is a Bank Loan?
The Bank Loan is basically a form of debt. The borrower receives a specific amount of money which he has to repay until the contract matures, usually monthly or quarterly bases. The lender or the bank gives out the money under a cost. This cost is called interest on the borrowers debt.
For example you need money to start a business, you go to the bank and ask for a certain sum of money. If the loan is granted then following the contracts outline you have to pay back the bank, this happen on a periodic or non periodic basis. Periodic means that you pay each month, quarter or half year. Your not just paying back the sum of money what you've borrowed but you have to pay interest also. That's why it's a good idea to check the interest rates under which your obtaining the loan. In the contract there's a fixed date until the loan matures as in the last day until you have to finish paying up. | | | | |
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