Advantages and Disadvantages of Bank Loan

Amount of money that is borrowed from the bank is known as bank loan, and this bank loan is for particular period or duration. And to repay the amount of money is depend upon the amount or size and duration of the loan. Bank provide various loan like Personal Loan, Student Loan, Mortgage Loan, Home-equity loan, Car loans, Two-wheeler loan.

Advantages and Disadvantages of Bank Loan

Advantages of bank loan:

  • Bank loan give flexibility or advantage over the overdrafts. In overdraft you have to pay full money when bank demand. But through bank loan you need not to worry about the full payment in one installment. You just have to do pay your installment regular and on time as per convenient.
  • Its gives low and cheap interest rate option as compare to overdraft.
  • If you have taken loan for business purpose, government gives some relaxation on tax.

Disadvantages of bank loan:

  • To get bank loan is very much difficult until and unless your business has a substantial record.
  • The interest rate of bank loan is very high for small business.

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