- Term Loans : Long term loans repayable after v years, medium term loan repayable inside a menstruum of three to v years.
- Demand Loans : Which are repayable on demand.
Cash credits are really popular, to a greater extent than flexible together with really convenient for the banker to keep a credit account. However, at that spot is possibility of misutilisation of loan past times the borrower together with it is non possible for the banker to verify destination use.
3. Overdrafts : Under this system, the client is allowed to overdraw his electrical flow occupation concern human relationship upwards to for certain amount granted amongst or without whatsoever security. Under this method likewise the involvement is charged exclusively on actual amount withdrawn irrespective of the amount granted. However at that spot is a minimum involvement clause inward instance overdraft is non made role of. Overdraft is non granted every bit a regular basis. It is purely temporary one. This type of advance is really of import inward occupation concern community.
4. Bills Discounted together with Purchased :Under this assort of lending, banks discount the bills of client together with render cash for the menstruum equal to the term of the pecker hold upwards credited to the customer’s occupation concern human relationship amongst the amount of the pecker after deducting about charges. The charges are called discount charges which is an income to the bank. It is an unsecured assort of loan so such loan is granted exclusively to financially potent together with known occupation concern men. If on the due appointment the pecker is dishonoured, the drawer is liable to pay the amount.
Sometimes, a banker may purchase a pecker instead of discounting it. The payoff of purchasing a pecker is that the banker becomes a holder for value of such a bill, since, he becomes the possessor of the bill, he tin terminate practice his correct every bit a pledge over the good, covered past times that bill, inward instance it is dishonoured.
5. Hire Purchase Advances : Such assort of loans are granted to businessmen who are engaged inward Hire Purchase sale. This organisation is really pop inward western countries. It is gaining popularity inward our province also. They don’t plough over finance to ultimate buyer, but they render finance to Hire Purchase dealers or the safety of proficient sold on Hire Purchase. This type of advance is pop especially inward carry operations.