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Essay On Long Term Loans

1500 Words6 Pages

Long-Term Loans:
Long-term loans are the ones having longer tenure or repayment period. The repayment period of a loan can range from a year to as long as 30 years. Usually, loans that are paid off in more than a period of 3 years are considered as long-term loans but there some type of loans that are designed in such as way that it can be catered to the borrowers belonging to the different economic segments of the society. It allows people to take maxim um benefits from the schemes operated by various public and private sector banks.

Such loans are also used for covering various financial needs such as business, wedding, home renovation, education, vacation, purchasing a vehicle, or any other type of personal or commercial purpose. Long-term …show more content…

Q. How long-term loans are better than short-term loans?
A. Long-term loans are better than short-term loans in terms of low interest rates and they also do not push the borrower to repay the loan in shorter span of time. It does not put excessive stress on the borrower as well.

Q. What is the role of the income of the applicant in securing a long-term loan?
A. The regular income of any applicant plays a major role in securing a long-term credit. Having sufficient work experience and regular job ensures that the applicant is likely to progress in future and he/she would be able to afford the EMIs as per the loan amount. Also, banks have to assure that the borrower is financially capable of repaying the loan and thus they require necessary information of the borrower about his/her work and regular monthly income. In additional to that, your regular monthly income decides the quantum of loan.

Q. Are long-term only sanctioned to individuals?
A. No, long-term loans are sanctioned both to individuals and companies. Both the individuals and businesses might need loan for expanding and setting up a business and banks understand this aspect very

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