allison001
Verified member
First of all,what is loan?
Alone is when one receives finance from a bank, friend or some finance entity with the assurance of returning it in the future along with the principal as well as the interest. Principal is the borrowed amount and interest is the charge on receiving the loan.
What are the advantages of taking a loan?
1. Flexibility
A bank loan allows one to repay as per convenience as long as the installments are regular and timely. Unlike an overdraft where all the credit is deducted in go, or a customer credit card with a maximum limit cannot be utilised in one go
2 cost effectiveness
When it comes to interest rates, bank loans are usually the cheapest option compared to overdraft and credit card.
3. Profit retention
When you raise funds through equity you have to share profits with shareholders. However in a bank loan raised finance you do not have to share profit with the bank.
4. Benefits of tax
Government makes the interest payable on the loan a tax deductible item when the loan has been taken for business purpose.
Talking about the disadvantages of taking a loan.
I'll also like you guys to share your ideas about the disadvantages
Alone is when one receives finance from a bank, friend or some finance entity with the assurance of returning it in the future along with the principal as well as the interest. Principal is the borrowed amount and interest is the charge on receiving the loan.
What are the advantages of taking a loan?
1. Flexibility
A bank loan allows one to repay as per convenience as long as the installments are regular and timely. Unlike an overdraft where all the credit is deducted in go, or a customer credit card with a maximum limit cannot be utilised in one go
2 cost effectiveness
When it comes to interest rates, bank loans are usually the cheapest option compared to overdraft and credit card.
3. Profit retention
When you raise funds through equity you have to share profits with shareholders. However in a bank loan raised finance you do not have to share profit with the bank.
4. Benefits of tax
Government makes the interest payable on the loan a tax deductible item when the loan has been taken for business purpose.
Talking about the disadvantages of taking a loan.
I'll also like you guys to share your ideas about the disadvantages