The loan is defined as the money, property, or material goods that one party provides to another party in exchange for paying the future amount of the loan along with interest or any other financial fee. The loan can be issued by individuals, companies, financial institutions, or governments And loans aim to increase the total money in the economy, open the doors of competition, and expand business operations, and interest and financial fees are one of the main sources of revenue for a wide range of financial institutions such as banks, as well as a source of revenue for some retailers by taking advantage of credit facilities.
Loans come over multiple time periods: they are short-term loans, medium-term loans, long-term loans, renewable credit, and permanent debt, none of which has a fixed expiration date, and renewable credit is an amount of money that the borrower withdraws and repays again, then borrows again when he There is a need for this, and the interest payment is only when using the funds.
The cost of the loan means the interest imposed on the borrower, and the interest can be fixed or variable. If it is variable, it can be adjusted daily or annually, and it is indicated that the determination of the interest cost is based on the value of the loan, and the relative risks related to it.
The collateral is the pledged asset as collateral for the lender against a loss in the value of the loan, in most cases the asset purchased with the loan amount is the only collateral, and in other cases the other assets that the borrower may have are collateral, and examples of assets are real estate or land, Cash can also be a guarantee.
Types of loans :
can be summarized as follows:
Business loans used to start small businesses.
Loans used to finance assets for the purchase of equipment, machinery, or commercial vehicles.
Credit card financing.
Financing sellers with commercial credit.
How to get rid of a bank loan
Many people who have obtained bank loans are looking for suitable ways to help them get rid of these loans, and here is a set of tips that help get rid of the bank loan:
Contact with the bank:
It is talking to a bank employee about the problem of getting rid of the loan, and trying to find an appropriate way to repay it, such as stopping paying the interest rate on the loan.
Preparing a personal financial budget:
It is a method that helps the loan owner know the movement of his personal funds, which contributes to determining the amount of expenses in excess of the need, the value of which can be allocated to pay off the value of the loan.
Sale of assets or property resulting from the loan or redundant:
It is the method used by people who lose the ability to pay the loan they owe, and who obtained it with the aim of buying a specific asset as a property or a car, so the person is forced to sell the asset that he bought with the borrowed or unused money or that exceeded his need so that he could pay the loan amount that resulted from it .
Pay more money than the minimum value allotted for payment:
It is a method of disposing of the bank loan by making more payments than the value of the monthly installment of the loan. For example, if the loan’s installment amount is 100 dinars per month, it is possible to pay 150 dinars to speed up the disposal of the loan in the event of a financial surplus available to the loan owner .
Get an additional part-time job:
It is that the bank loan owner gets a job other than his primary job in order to contribute to increasing his income and getting more cash to pay off the loan amount that is due.
It is the disposal of personal debts with large interest rates, which contributes to collecting the debts together within only one loan, and this helps to follow up all the payments of the loan in an easy way.
Get help paying for the loan:
It is to use one of the charities that provides advice and aid on how to repay the loans.
Looking for a drop in interest rates:
It is seeking to secure a low interest rate on the credit card in the event that the interest rate is high, as the request to reduce the interest rate is very popular, especially if the borrower has a distinguished history in paying the loan installments bills that result from it.