An increasing number of banks are offering bank loans with varying interest rates and repayment options. A bank loan is an amount that is borrowed to be repayed with an interest rate according to an agreed term. The kind of bank loan that a borrower chooses will determine how much he/she can borrow and for how long. Apart from secured and unsecured bank loans, banks also have a number of options like car loans, home improvement loans, graduate loans, and business loans etc.

When a borrower opts for a bank loan he /she will have to pay monthly installments which will comprise of the loan amount and interest. The interest rate will either be fixed rate where the borrower pays the same rate throughout the duration of the repayment period or a variable rate in case of long term loans when the rates keep changing. Generally banks don’t give bank loans to customers who have adverse credit records. If a borrower has encountered credit problems or has been struggling to get a loan from many places, it is unlikely that he will secure a bank loan.

Secured bank loan: When a borrower avails a secured bank loan he/she puts up property as collateral for the loan amount. The interest rates and repayment terms for a secured bank loan will be relatively comfortable for the borrower as the capital is secured against collateral. They can be availed for larger loan amounts and can be used for any purpose ranging from home improvements, car purchase or educational purposes.

Unsecured bank loan: With an unsecured bank loan the borrower need not offer any collateral. But these loans come with higher rates and strict repayment terms. Offering new financial horizons to financially challenged individuals an unsecured bank loan comes with zero risk for the borrower.  While availing a bank loan, the borrower needs to keep in mind the following factors: Loan amount: The borrower needs to realistically assess his income and needs to determine a loan amount which he/she can effectively pay back. Type of loan: The type of bank loan that you choose will determine the interest rates and the repayment terms that accompany your bank loan. Borrowers can choose between secured and unsecured options depending on their circumstances.

Collateral: When a borrower opts for a secured bank loan, he/she will have to place some collateral. By placing a high value collateral, the loan application is reviewed and approved quickly. While deciding on the best bank loan it is advisable to compare services and communicate with the bank in case of doubts before making a choice. Although a bank loan might turn out to be a slightly expensive option, it offers borrower an opportunity to avail expert advice and choose options suited for the borrower’s need. For a wide variety of bank loan deals log on to

If you need some extra money, then borrowing from your bank might be the answer. If you use a bank simply for savings and a current account, then perhaps it is time to look at other financial products that your bank can offer. If you want to borrow from your bank, here are some of the possible options and benefits.

Why borrow money?

People borrow money for all sorts of reasons, and in all different ways. If you are finding it hard to make ends meet at the moment then getting a credit card or loan may help you out over the next few months. Also, if you need to make a large purchase but you need to spread the cost, then borrowing from your bank is a good option.

Credit cards

Perhaps the most common way to borrow from your bank is to get a credit card. A credit card gives you a certain amount of money or credit that you can spend, which you have to pay back with interest. Bills are paid monthly and you can choose to pay the full amount or just the minimum payment each month. Borrowing money on a credit card is expensive, but for short-term purchases they can be great if you pay the balance back in full each month.

Loans

Loans are another common way to borrow from your bank. Your bank is likely to have a variety of loans on offer, ranging from small personal loans to much larger loans for business or home improvements. If you need to pay off high interest debts or make a large purchase and pay it back slowly, then loans might be the right option for you.

Advantages of using your bank

The main advantage of using your bank to borrow money is that they know what sort of spending patterns you have, and if you have built a rapport with them they are likely to be more generous than other lending institutions. It may also be convenient to use the same bank that you do now, as all your accounts are in one place and you can manage your money more easily.

Disadvantages

There are also a number of disadvantages to using your own bank. Although your bank may give you a good deal, it may not be the best deal you can possibly find. Although speaking to your own bank is a good idea, you should shop around and look at other lenders in order to get the best possible terms. You should also make sure that borrowing money is right for you, and that you can make any repayments that are required.

Once upon a time you go to the bank only for savings account dealings,and business persons was goes only for current account dealings.But Now time has been changed the Banking process has become more comfortable but also more complex.there are few tips has given for smart banking

1.Watch your account and cash flow.mostly bank pay you a small interest against your deposit, this interest rate calculate only on the minimum balance held between the 10th and 31st days of every month So, it makes sense to make most of your payments and deposits between the 1st and 10th days of a month, if possible, to get the maximum interest on your deposit. Use cheques judiciously. Most banks give two chequebooks free per quarter and charge Rs 2 for every additional leaf.
If wants to avoid the writing out cheques, it would make sense to arrange for your bank to automatically pay your utility bills, SIP (systematic investment plan) installments and EMIs (equated monthly installments). Make sure you get an alert before the payment is made so that you can stop it if you think the bill is faulty.
The most expensive penalty is for non-maintenance of the minimum quarterly average balance. So, it pays to choose a bank where this is low or arrange it to be zero. Be sure about the regular outflows and ensure you have enough money in your bank to make the payments.

2.  An overdraft facility on your account. The overdraft facility can ensure that your cheques don’t bounce and automatic payments are not held back even if there is a bit of a delay in the arrival of money. OD works as a safety net if you fail to track how much you have paid out. It is cheaper than taking a personal loan and needs no extra paperwork. For instance, State Bank of India [Get Quote] would give you an OD against fixed deposits at interest rate on FD plus 1.50 percentage points.

3. Try cooperative banks. You can turn to these if you are looking for a bank to make a term deposit or open an account. They often give higher interest than commercial banks, but may have limitations in terms of access. Their loans, too, could be a bit cheaper. But remember, they are riskier, so do your due diligence.

4. Make the best of your ATM card. Using ATMs for withdrawing money and getting statements is cheap and convenient. Some private banks limit cash transactions to 12 in a year from the base branches, that is, those in the same city. A charge of Rs 50 may be levied on every additional transaction.

5. Know your manager. One way to do this is to invent a pretext for meeting the bank manager and then creating scope for further interactions. If there is a problem, knowing someone in the bank helps.
Most managers would like to build strong business relations with their customers. So, they are likely to reduce or waive a charge if you bring it to their notice that it appears too high or that you have been billed for something beyond your control.

6. Be careful about bank investment instruments. Banks sell two kinds of investment instruments. Products such as fixed deposits and recurring deposits are offered by banks themselves and carry a government guarantee against a default or loss up to Rs 100,000.
In the second variety come products such as insurance and mutual funds. Even if a mutual fund scheme has been sold by a bank, there is no guarantee against a loss on an investment in it. Insurance will usually be pushed by your man in the portfolio management service.