Personal Investment & Loan Tips : Bank Loan Tips & Advice
This is financial adviser Patrick Munro talking
about define a loan. A loan is an opportunity for an individual to acquire something that
they need or want, that they don’t necessarily have the money for. But they have the ability
to pay. And they use a creditor or a bank or institution to achieve that money. And
they apply based on credit worthiness. And the creditor will normally look at the credit
worthiness of the individual and make a loan granting decision. In doing so, they will
normally take security of the underlying asset to make the loan. And they expect to be repaid.
And if they are not repaid the security will then be put up as collateral and will be taken
back from the borrower. It normally is a win win situation, because at the end when you
pay off the loan, you have received the asset. And it becomes titled under your name. And
of course the interest has been paid to the creditor along the way and provided income
for him. This is Patrick Munro talking about the nature of loans.