When a bank wishes to build a long-term relationship with a borrower, it may offer Loan.
In a loan, a certain quantity of money is given to another person in exchange for the value or main amount being repaid at a later date. In many circumstances, the lender increases the principal value by adding interest or finance charges, which the borrower must pay in addition to the principal sum.
Loans may be made for a predetermined, one-time sum or as an open-ended line of credit with a cap up to a certain amount. In addition to secured and unsecured loans, there are also commercial and personal lending options.
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