Question

What are loan products?

Answer 1

A loan product refers to the type of credit vehicle in which a sum of money is lent to another party in exchange for future repayment of the value or principal amount. A loan is a sum of money that one or more individuals or companies borrow from banks or other financial institutions so as to financially manage planned or unplanned events. In doing so, the borrower incurs a debt, which he has to pay back with interest and within a given period of time.

Loan products are provided by banks and other financial institutions. These products can specialised in order to meet the borrowing requirements of a specific borrower.

There are various types of loan products :

Personal Loans : These are the types of loans available for individuals to fulfill their expediture.

Credit Cards : These are a type of loan product which allows the borrower to puchase something at credit and pay for it on a later date.

Home Loans : These are the type of loans that are used by an individual to puchase a house now and pay for it in a given time period eg 20 years

Small Business Loans : These loan products are available for business owners who have a need for cash to support their working capital or fund their expansion project.

Car Loans : These are loan products provided to individuals who want to buy a car now and are willing to pay for it in a given period of time.

There are many more types of loan products. Different banks and financial institutions provide different loan products, some of which are tailor made for the needs of the borrower.