Finance Management

The current financial system has evolved itself to the current stature to allow the distribution of assets, even to the common man, whose current capacities might prevent him from a certain acquisition, which might be monetary or otherwise. Therefore, it is added the much lacked wing span to the dreams of the bourgeois in the society, giving them a somewhat equal chance at a desired lifestyle , on par with other sections.

      The topic can be lucidly comprehended under the following headings:-

• Definition of a Loan
• Loan variants
• The markets under the purview
• Payment of a Loan
• Abuses while lending

• The loan, is a type of debt, which is taken by a borrower from a lender and as is usual with the other financial instruments dealing with debts it comprises the redistribution of assets between the two parties involved.

Loan Variants

• Secured : The borrower swears by some asset as a collateral for the borrowed loan
• Subsidized Loan: A loan that does not add interest until the borrower begins to pay it. Commonly seen in colleges
• Non-Subsidized Loan: A loan that adds up interest from the day of disbursement
• Mortgage Loan: A very common type of loan used all over the world for acquiring or creating houses, wherein a certain security or lien is given to the bank which possesses the possession of the mortgaged item till the loan is settled. Therefore in case, the borrower fails to repay, the bank can sell the item to settle the debt.
• A store hedge load: This is a type of loan wherein the user uses stock possessed in lieu of loses incurred during the course of the loan.
• Unsecured Loan: In this type of loan, there is no security placed in lieu of the loan. Examples include credit cards, personal loans, bank overdrafts and corporate bonds.

Target Markets

• Personal : Refers to personal or loans by an individual
• Commercial: refers to loan taken by a business group or institution

Abuses while lending

• Predatory Loan : This is a type of loan that is allocated to the user by a lender with the malicious intent of compromising the borrower. Therefore while loans are normally directed at helping the user, this type of a loan is to debase or be- little an individual. This a very common type of loan used in rural India to exploit individuals who are too helpless to avoid the loan.
• Usury Loan: This is an excessive interest rate forcing the user to pay excessive interest rate thereby exploiting the situation. Many banks have been implicated with abusing this possibility to exploit helpless individuals.