If you need to borrow money, first, you need to decide which type of loan is right for your situation. Because, not all loans are created equal.
What is a loan?
A loan is a type of credit, usually a sum that is borrowed and agreed to be repaid over an agreed period, including the principal with interest.
Loan Offer Bangladesh can help you find the right loan for you. Our qualified checking information will give you the opportunity to get your loan taken, as well as showing guaranteed interest rates, so you can see all your options.
When one’s financial plans are underway, one does not worry about debt. But sometimes financial solvency is not there when you must borrow the required money from a loan manager. A loan can come in handy if you need help reaching a goal – like buying a new car, renovating your home, or dealing with some existing debt.
What do I have to pay for the loan?
Smaller loans usually have higher interest rates, which can affect your loan amount. However, if you can lower your monthly payments by taking out a longer-term loan, it may be easier for you to pay.
It is important for you to decide which loan you will apply for in terms of monthly repayments and what your expenses will be. Knowing why you should take a small loan and what are the benefits of taking a big one. A loan calculator can help you determine how much you need to pay back each month and how much time you can afford to pay.
For example, on loan repayment calculation:
| Loan Amount | Interest Rate | Loan Agreement Period |
| BDT 50,000 | 9.00% | 60 months |
| Monthly Instalment (Tk.) | Total Payment (Tk.) | Total Payment (Tk.) |
| 1037.92 | 62275.07 | 12275.07 |
Key Takeaways to understand before signing the agreement
When you contract a loan, you must carefully consider the terms of the contract. Some key terms important to note include:
- Interests rate
- default interest rate
- Prepayment process
- Event of Default
- committed or uncommitted
- Loan Repayment plan
- Loan type secured or unsecured and
- Bilateral or syndicated.
Understanding loans
A loan is a form of the loan owed by an individual or other entity. The lender—usually a bank, financial institution, or government—advances some money to the borrower. In return, the borrower agrees to a set of terms, including any finance charges, interest, repayment schedule, and other terms. In some cases, the lender may require collateral to secure the loan and ensure repayment, these are called secured loans.
An unsecured loan means that the borrower does not have to provide any assets as collateral. Lenders can estimate the customer’s ability to repay the loan and decide whether the customer will repay the loan or not. Thus, unsecured loans include certain items like credit cards, education loans, and personal loans.
Components of a Loan
There are several important conditions that determine how quickly a borrower can repay the loan and the size of the loan, which are discussed below:
- Principal: Principal is the amount of loan money that is being borrowed.
- Loan Tenure: The amount of time a borrower gets to repay the loan.
- Interest rate: The rate at which the borrower borrows money from the bank and the amount owed increases, usually expressed in terms of the annual percentage rate (APR).
- Loan Repayment: The amount the borrower must pay each month to meet the terms of the loan. Usually based on principal, loan term, and interest rate.
The right guide to getting a loan
Below are some tips that can improve your chances of getting the loan you need.
- Apply for the right amount: Considering all about your financial history, you should apply along with the proper documents.
- Meet the criteria:
- Citizens of Bangladesh
- Age at least 20 years old
- Lives in Bangladesh
- Minimum income requirements
- Be employed or receive regular income
- Have a good credit rating
- Good credit rating: A credit score is an indicator of a person’s creditworthiness based on their borrowing and repayment history.
- Good account history: If your monthly salary is paid into your account and you spend what you need and put aside savings, this is a good demonstration that you know how to budget and manage your money.
- Good savings record: Another way to show your financial responsibility is to regularly contribute to your savings.
- Anyone can easily get loans through financial resources like banks and private financial institutes.
- Borrowers cannot be exploited in emergency situations
- Different loans are available according to the needs of the customer
- Competitive environment of interest rates from a financial institution or a bank
- In government schemes, borrowers can enjoy tax savings, lower interest rates etc. if the loan is taken within a specified period
- Banks is the cheapest solution to available loans.
Disadvantages of Loan
- Getting a loan is a tedious process and usually involves a variety of paperwork, documents, evidence, and witnesses
- Many times, the documentation and papers required by the institution become very unnecessary which makes it impossible for the customers to get the loan
- A loan is not granted in full amount. A loan has refinanced and processing ratios
- As borrowers opt for unsecured loans, they are charged higher interest rates
- Even if the customer manager makes a late payment, the customer’s banks may still report the customer to the credit bureaus, resulting in a negative impact on the customer’s credit score
- Borrowers with low credit scores find it difficult to get loans.
A loan is when a person or company borrows money from a lender. Loans can be classified into three main categories, namely, secured & unsecured, conventional & open, and closed-end loans. The loan that a person wants to apply for depends on certain things like his monthly income, expenses, and credit history.
Ready to apply?
If you are already a customer, you can apply through your bank. And if you are not a customer, you can apply for a loan by checking the information on our blog within 10 minutes of time at Loan Offer Bangladesh.
Frequently Asked Questions (FAQs) for Loan in Bangladesh
Q: What is a Loan?
A: A loan is an amount of money lent by one party to another with the agreement that the borrower will repay the total amount along with interest and other fees or charges in the future.
Q: What are the types of loans in the banking sector?
A: In the banking sector, there are typically two types of loans: secured and unsecured loans.
Q: What is a secured loan?
A: A secured loan requires collateral, such as property, assets, or cash, to secure the loan. Common examples include mortgages, home equity loans, and auto loans.
Q: What is an unsecured loan?
A: An unsecured loan is a type of loan that doesn’t require collateral. Borrowers don’t need to provide details of an asset (such as property or an asset) as security for the loan.
Q: Where can I apply for the loan offline?
A: You can contact any Bangladeshi bank’s customer care or request a client visit. Alternatively, you can visit the nearest branch of the bank to apply for a loan.
Q: Where can I get the application form for the loan?
A: You can find the loan application form on the home page of the bank’s website or at the nearest branch location.
Q: What is the maximum tenure of a loan?
A: The maximum tenure of a loan depends on the loan type. Generally, banks offer loan tenures ranging from one year to five years for personal loans, while other types of loans may have tenure options of up to 25 years.