Question

why are terms and conditions like interest rate ,time period guarantee mortgage etc necessary for giving a loan ? explain with an example for each condition​

Answer 1

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ᴡʜʏ ᴀʀᴇ ᴛᴇʀᴍꜱ ᴀɴᴅ ᴄᴏɴᴅɪᴛɪᴏɴꜱ ʟɪᴋᴇ ɪɴᴛᴇʀᴇꜱᴛ ʀᴀᴛᴇ ,ᴛɪᴍᴇ ᴘᴇʀɪᴏᴅ ɢᴜᴀʀᴀɴᴛᴇᴇ ᴍᴏʀᴛɢᴀɢᴇ ᴇᴛᴄ ɴᴇᴄᴇꜱꜱᴀʀʏ ꜰᴏʀ ɢɪᴠɪɴɢ ᴀ ʟᴏᴀɴ ? ᴇxᴘʟᴀɪɴ ᴡɪᴛʜ ᴀɴ ᴇxᴀᴍᴘʟᴇ ꜰᴏʀ ᴇᴀᴄʜ ᴄᴏɴᴅɪᴛɪᴏɴ....

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ᴀɴꜱ...

ꜱᴏᴍᴇ ᴄᴏɴᴅɪᴛɪᴏɴꜱ ᴀʀᴇ ᴇꜱꜱᴇɴᴛɪᴀʟ ꜰᴏʀ ʟᴏᴀɴ:

(1) ᴛɪᴍᴇ: ᴛᴏ ᴘᴀʏ ᴛʜᴇ ʟᴏᴀɴ ᴏɴ ᴛɪᴍᴇ ᴏꜰ ʀᴇᴛᴜʀɴɪɴɢ ʟᴏᴀɴ ɪꜱ ᴀʟꜱᴏ ꜰɪxᴇᴅ ᴡʜɪʟᴇ ɢɪᴠɪɴɢ ᴛʜᴇ ʟᴏᴀɴ ᴏɴʟʏ ʙᴀɴᴋ ꜰɪxᴇᴅ ᴛʜᴇ ɪɴꜱᴛᴀʟᴍᴇɴᴛꜱ ᴀɴᴅ ᴛᴇʟʟ ᴛʜᴇ ᴄᴜꜱᴛᴏᴍᴇʀ ᴀʙᴏᴜᴛ ɪᴛ.

(2)ʀᴀᴛᴇ ᴏꜰ ɪɴᴛᴇʀᴇꜱᴛ : ʀᴀᴛᴇ ᴏꜰ ɪɴᴛᴇʀᴇꜱᴛ ɪꜱ ꜰɪxᴇᴅ

ꜰᴏʀ ꜱᴘᴇᴄɪꜰɪᴄ ᴀᴍᴏᴜɴᴛ. ʙᴀɴᴋ ʙᴇꜰᴏʀᴇ ɢɪᴠɪɴɢ ᴛʜᴇ ʟᴏᴀɴ ᴛᴏ ᴛʜᴇ ᴄᴜꜱᴛᴏᴍᴇʀ ᴍᴀᴋᴇ ɪᴛ ᴄʟᴇᴀʀ ᴛʜᴀᴛ ᴡʜᴀᴛ ᴡɪʟʟ ʙᴇ ʀᴀᴛᴇ ᴏꜰ ɪɴᴛᴇʀᴇꜱᴛ ᴏɴ ᴛʜᴇ ʟᴏᴀɴ ᴀᴍᴏᴜɴᴛ ᴛʜᴇ ᴄᴜꜱᴛᴏᴍᴇʀ ᴡɪʟʟ ᴘᴀʏ

(3)ɢᴜᴀʀᴀɴᴛᴏʀ : ɢᴜᴀʀᴀɴᴛᴏʀ ɪꜱ ᴄᴀʟʟᴇᴅ ᴀꜱ ꜱᴜᴘᴘᴏʀᴛᴇᴅ ʟᴏᴀɴ ᴛᴀᴋᴇʀ. ɢᴜᴀʀᴀɴᴛᴏʀ ɢɪᴠᴇꜱ ɢᴜᴀʀᴀɴᴛᴇᴇ ɪꜰ ᴛʜᴇ ʟᴏᴀɴ ɪꜱ ɴᴏᴛ ʀᴇᴘᴀʏ ɪɴ ᴛɪᴍᴇ ᴏʀ ʟᴏᴀɴ ɪꜱ ɴᴏᴛ ᴘᴀʏᴇᴅ ᴀᴛ ᴀʟʟ, ʜᴇ (ɢᴜᴀʀᴀɴᴛᴏʀ) ᴡɪʟʟ ᴘᴀʏ ᴛʜᴇ ʟᴏᴀɴ ᴀᴍᴏᴜɴᴛ ᴛᴏ ʙᴀɴᴋ.

(4)ᴍᴏʀᴛɢᴀɢᴇ : ꜱᴏᴍᴇ ꜰɪxᴇᴅ ᴅᴇᴘᴏꜱɪᴛ, ʜᴏᴜꜱᴇ, ᴘʀᴏᴘᴇʀᴛʏ, ᴛʜᴇ ᴘᴇʀꜱᴏɴ ʜᴀꜱ ᴛᴏ ᴋᴇᴇᴘ ɪɴ ᴛʜᴇ ʙᴀɴᴋ ᴀɢᴀɪɴꜱᴛ ᴛʜᴇ ʟᴏᴀɴ, ᴛʜɪꜱ ɪꜱ ᴀ ꜱᴏʀᴛ ᴏꜰ ɢᴜᴀʀᴀᴜᴛᴏʀ ᴏɴʟʏ...

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