Micro Finance, cooperative society software will print collection sheets. It can restructure and reschedule the loan repayment. There are unlimited numbers of savings products that can be managed through the software which can be associated with any type of customer. Current account can be managed, with or without interests.
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What is Loan?What is Loan?
• The term ‘loan’ refers to the amount
borrowed by one person from another.
• The amount is in the nature of loan and
refers to the sum paid to the borrower.
• from the view point of borrower, it is
‘borrowing’ and from the view point of
bank, it is ‘lending’.
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LOANLOAN
•Loan may be regarded as ‘credit’ granted
where the money is disbursed and its
recovery is made on a later date.
•It is a debt for the borrower
•While granting loans, credit is given for a
definite purpose and for a predetermined
period.
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LOAN INTERESTLOAN INTEREST
• Interest is charged on the loan at
agreed rate and intervals of payment.
• ‘Advance’ on the other hand, is a ‘credit
facility’ granted by the bank.
• Banks grant advances largely for short-
term purposes, such as purchase of
goods traded in and meeting other
short-term trading liabilities.
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First Page :First Page :
• There is a sense of debt in loan, whereas
an advance is a
• facility being availed of by the borrower.
• However, like loans, advances are also to
be repaid.
• Thus a credit facility- repayable in
instalments over a period is termed as
loan while a credit facility repayable
within one year may be known as
advances.
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Utility of LoansUtility of Loans
Loans and advances granted by
commercial banks are highly beneficial
to individuals, firms, companies and
industrial concerns.
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Utility of loans and advancesUtility of loans and advances
•The growth and diversification of
business activities are effected to a large
extent through bank financing.
•Loans and advances granted by banks
help in meeting short-term and long term
financial needs of business enterprises.
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• Loan is the amount borrowed from bank.
• The nature of borrowing is that the
money is disbursed and recovery is made
in instalments.
• While lending money by way of loan,
credit is given for a definite purpose and
for a pre-determined period.
Utility of LoanUtility of Loan
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•Depending upon the purpose and period of
loan, each bank has its own procedure
•for granting loan.
•However the bank is at liberty to grant the
•loan requested or refuse it depending upon
its own cash position
•and lending policy
AdvancesAdvances
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THERE ARE TWO TYPES OF LOANS:
1.Demand loan
2.Term loan
TYPES OF LOANSTYPES OF LOANS
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Demand Loan:
•Demand Loan is a loan which is repayable
on demand by the bank. In other words, it
is repayable at short-notice.
•The entire amount of demand loan is
disbursed at one time and the borrower has
to pay interest on it
TYPES OF LOANSTYPES OF LOANS
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Term Loan:
•Medium and long term loans are called
term loans.
•Term loans are granted for more than a
year and repayment of such loans is
spread over a longer period.
•The repayment is generally made in
suitable instalments of a fixed amount.
TYPES OF LOANSTYPES OF LOANS
