How It Works
Borrower's Need
When someone needs money for a specific purpose, such as buying a home, starting a business, paying for education, or covering unexpected expenses, they apply for a loan.
Loan Application
The borrower submits a loan application to a lender. This application typically includes personal or business financial information, the purpose of the loan, and the desired loan amount.
Funds Disbursement
Once the loan is approved, the lender disburses the funds to the borrower. The borrower can then use the money for the intended purpose.
Repayment
The borrower is obligated to repay the loan according to the agreed-upon terms. This usually involves making regular payments, which may be monthly, quarterly, or according to another schedule. These payments include both the principal amount (the borrowed sum) and interest.
How Process Works
Completion of Loan
When the borrower makes all the required payments, the loan is considered paid off, and the borrower no longer owes any money to the lender.
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