Bank Loans: Definition, Characteristics, and Advantages & Disadvantages, Resúmenes de Administración de Empresas

¡Descarga Bank Loans: Definition, Characteristics, and Advantages & Disadvantages y más Resúmenes en PDF de Administración de Empresas solo en Docsity! Loan Definition Contract in which the financial institution gives the client an amount of money, the latter being obliged, after a set period, to return said amount, plus accrued interest. characteristics • Money delivery is simultaneous to the signing of the contract. • Recommended for the purchase of consumer goods or services. • It is usual practice intervention by notary public, and most are formalized in policy, since the simplicity of the intervention procedure and the cost recommends it. • In some cases, public deed is mandatory, as in the event that there are mortgage guarantees, in the case of complex operations or large amounts. • The policy that formalizes a loan operation is a document that proves a liquid and enforceable debt by itself. Instrument Advantages • A bank loan can be easily obtained. In less than an hour a qualified borrower can complete the transaction of a bank loan. • A bank loan can be used in many ways: money can be borrowed for expensive items such as furniture, vehicles, or home renovations. • The money comes from a solid source. Disadvantages of the instrument • Some loans include a prepayment fine, preventing the borrower from paying the bill early without incurring an additional cost. • There may be stipulations on how money can be used. • It depends on access to bank financing. • You may need strong payment guarantees