Why Loans from banks are most preferred in the financial sector

There are many types of banks in our country. When segregated they can be grouped in mainly two divisions -

i. Scheduled Banks
ii. Non-Scheduled Banks

Under Scheduled banks come central banks, co-operative banks and under Non-Scheduled banks come commercial banks. Co-operative banks can be of 3 types segmented as Level 1, Level 2, Level 3 while commercial banks are segmented into three types of banks which are the Public sector, Private sector and Foreign banks. Under Non – Scheduled Banks also comes other banks named regional rural banks, local region banks Specialized Banks, Small Finance Banks and even payments banks. Among all these, commercial banks are mostly preferred by people to opt for a loan from. This is mainly because commercial banks are common for both personal bank accounts and commercial bank accounts. They not only offer the service of savings or loan but also a variety of other services.

They surely have more advantages than other types of banks discussed above. Also, these types of banks are well spread across the country with multiple branches in every city which makes it easy for people to enjoy the benefits of the bank. These commercial banks also have the ability to provide services at a discounted price. These banks not only offer loans and savings but also various other financial products at discount like insurance, Money transfer, Debit card, Credit card and various others. Each bank has its own identity code, namely the IFSC Code. This code is the  Indian Financial System Code. This code is given to the banks by the RBI (Reserve Bank of India). Some benefits of taking a loan from Commercial banks are -

i. Commercial banks have been providing timely assistance to groups as well as individuals whenever needed.

ii. The transaction information and records are kept a secret between the bank and user. No information is given to third parties.

iii. Employee services are looked at even after retirement.

iv. Better resolutions are provided for problems by the banks.

v. Banks are widely spread across the nation providing ease to the borrower.

vi. Loans from commercial banks are flexible and can be increased according to needs.

vii. These banks offer loans and services at a discounted rate than others.

Earlier when a person or group needed to know a liability of the loan which they are planning to take in future they had to go to their nearest branch and inquire about that but now times have changed a person can do all of that just by sitting at the home at the eraser of their fingertips. They can view the websites of different banks and compare the interest offered by various banks. Then they can use a tool named Personal Loan EMI Calculator. This tool helps a person calculate monthly EMI which the borrower will have to pay if the loan is taken in future. In this, the person has to input mainly three things. They are as followed -

Principle - This is the value of a loan that is sought by the individual to borrow from the bank in the form of a loan.

Interest - This is the rate of interest which the bank would be charging from the borrower to provide a loan.

Duration - This is the time duration for which the loan is taken by the borrower.

After all these inputs are inserted into the online calculator the result comes up on the screen in a flash. This result is the EMI which is to be paid every month. Therefore we talked about how loans are preferred from banks in the financial sector rather than any other source.

Conclusion:

There are a variety of banks in our country but they all serve a different purpose. Taking a loan for an individual is possible from commercial banks which can offer loans at affordable prices and also the guidance to choose the better financial services.