bank and loanPPT

Types of LoansFixed-Rate LoansVariable-Rate LoansFlexible-Rate LoansLoan Proc...

Types of LoansFixed-Rate LoansVariable-Rate LoansFlexible-Rate LoansLoan ProcessApplicationUnderwritingFundingLoan FeaturesTerm of LoanPrincipal AmountInterest RateFees and PenaltiesMortgagesTypes of MortgagesLoan Process for MortgagesMortgage FeaturesBanking and loans are two sides of the same financial coin, with banks serving as the primary source of loans for individuals and businesses. Bank loans are typically categorized as secured or unsecured, with secured loans tied to collateral and unsecured loans not. Common types of bank loans include installment loans, lines of credit, and overdraft protection. installment loans require fixed monthly payments, while lines of credit allow borrowers to draw against a pre-set credit limit. Overdraft protection is a type of short-term credit that allows borrowers to overdraw their checking accounts without incurring fees. Loans can be used for a variety of purposes, including education, home buying, and general expenses. When applying for a loan, borrowers will typically fill out an application, which is then reviewed by the bank. If approved, the loan is underwritten and then funded to the borrower. Loan features such as term length, principal amount, interest rate, and fees can vary depending on the type of loan and the lender. For example, a mortgage loan is a type of bank loan used to purchase real estate. Mortgage loans are typically larger than other types of loans and require more stringent underwriting criteria. When applying for a mortgage loan, borrowers typically undergo a more extensive application and underwriting process. Once approved, the loan is then funding to the borrower to purchase the property. Mortgage loan features include principal amount, interest rate, term length, and prepayment penalties. Variable-rate mortgages are indexed to a financial index such as the Prime Rate, while fixed-rate mortgages have a fixed interest rate for the duration of the loan. Fees and penalties may apply if the loan is paid off early or if the principal is not repaid according to the terms of the loan agreement. In conclusion, banks play a crucial role in providing loans for individuals and businesses. Bank loans are typically categorized as secured or unsecured and can be used for various purposes. When applying for a loan, borrowers will typically undergo an application and underwriting process. Loan features such as term length, principal amount, interest rate, and fees can vary depending on the type of loan and the lender.