pramalkumarsamanta By pramalkumarsamanta, 19th May 2015 | Follow this author | RSS Feed
Posted in Wikinut>Money>Loans

Loans can create asset if the E.M.Is are paid regularly for a certain period and may create debt trap if the payments are paid casually . Loans can help the consumers to improve their standard of living if he is , always , serious about clearing their dues per month. Loans should not be treated as financial burden.


It is the primary duties and responsibilities of the bank authorities to consider the cases of applications for sanction and disbursement of loan. The authorities demand for certain financial documents like bank statement , copies of form 16 and three years income tax return file etc for thorough examination so as to ascertain the financial status of the applicant .They demand financial securities like life insurance coverage, bank fixed deposit (F.D) , national savings certificate (N.S.C), Kisan Vikas Patra ( K.V.P) etc from the applicant.
There are different types of bank loans sanctioned by the nationalized banks and the private banks for various categories of the consumers. 1) Industrial loan for setting up of new industries and for modernization of old existing industries,2) Business loan for starting new business,3)House building loan for purchase of new / existing house or new /existing flats , 4) car loan for purchase of new cars either for personal use or for commercial purpose.5) Four/ Two wheeler loans for purchase of lorries /trucks/ tractors etc, 6) Education loan for pursuing higher studies in the reputed technical institutes like I I Ts and I I Ms .,7) Personal loan for purchase of consumer goods,8) gold loan against gold ornaments . There are sundry loans like House renovation loan etc which are considered for sanction by the banks.
If the terms and conditions are satisfied by the bank . they may consider for sanction and subsequently take up for disbursement , only for 80% of the sanctioned loan amount ,provided the agreements are executed .

Utility of loan in the development process

Sanction and disbursement of loans have a positive role in the development process. of the peoples in the country. Without loan, no country can progress . Similarly no individual can achieve progress without obtaining loan from the bank.No new industries can be set up without loan from the bank or from the financial institutions. No existing industries can be modernized without the help of the bank. No salaried employees can construct house or flats without sanctioning of bank loan. No deserving meritorious students can pursue their higher studies without the active support of the bank. No consumer goods can be purchased against the personal loan considered by the bank. Gold loans can be helpful for immediate urgent need of the family against golden ornaments. Similarly car loans can be utilized for the purchase of cars for personal use or for commercial purpose. Four wheeler loan are also useful for the unemployed youths. It is needless to say that the middle class peoples of the society are very much dependent on the bank loan to complete their desires. In times of crisis and when there is urgent need of money . the private lenders of the society offers money at an exorbitant high rate of interest .But generally this sort of borrowing is totally discouraged.


E.M.I commences after the loan is disbursed covering gestation period. If failed in repayment of loan for consecutive three months .The bank authorities exert pressure on the consumer to clear the outstanding dues .In spite of persuasion , the consumer fails to repay, the bank authorities consider the case as non-performing asset. It is the primary duties and responsibilities of the consumer to update the dues, As a consequence there of , the bank authorities are very much conservative in sanctioning their loan.


Agreements, Businessloan, Carloan, Conservative, Disbursement, Educationloan, Exorbitant, Financial Documents, Financial Securities, Four Wheeler Loan, Gestation Period, House Buildingloan, Industrial Loan, Loan, Personal Loan, Private Lenders, Sanction

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author avatar pramalkumarsamanta
I am a retired government officer.I am a postgraduate in life sciences, I have a passion for writing on any topic.

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