A loan involves borrowing a lump sum from a lender, and making regular (often monthly) payments until the loan is entirely repaid. Beyond repaying the loan principal, a borrower must pay interest at a set rate as well as any additional lender fees.
Offer customers interest on deposits, helping to protect against money losing value against inflation. Lending money to firms, customers and homebuyers.
The bank then uses the majority of these deposits to lend to other customers for a variety of loans.
Banks play an important role in the economy for offering a service for people wishing to save.
Banks also play an important role in offering finance to businesses who wish to invest and expand.
Benefits To Customer
Anyone over the age of 18 can access one, as you don’t need an asset to secure it against
You can have flexible time periods to repay, this will vary depending on the amount you borrow
They pose less risk than secured loans, as your assets cannot be reclaimed if the debt isn’t repaid
They are usually very quick for not only a decision but the money being transferred to your account
Loans are pretty versatile in their purpose, as you can use the money for almost anything.
Certain providers offer payment holidays, which gives you a break from repaying your monthly repayments.