While you are planning to start a business or want to purchase inventory, it requires an ample amount of money.In case, you don’t have enough finance, then get the bank loans in Malaysia.There are several options for attaining the required funds; however, a bank loan is the most secure choice. These loans are offered at the lower interest rate than other alternatives. Hire purchase, factoring, fixed asset, and working capital are some of the examples of different types of bank loan. We can pick any loan type, which has the potential to fulfill the requirements.
Bank loan offers plenty of benefits, which provides a great comfort zone to the borrower.Thechief benefit is flexibility as we don’t need to take tension related to regular payments of installment. On the other hand, the amount of bank drafts must have to be paid when the bank wants. Here are some more benefits of taking bank loan –
- There is only arrangement free, which borrower have to pay in the starting of the loan. However, the annual renewal fee is necessary for an on-demand loan.
- Bank loans are the perfect option when it comes to the cheap interest rate. Thus, it is a money saver choice. In fact, we will also clearly know about the repayments as interest rates are fixed.
- Borrowers can easily get the bank loans in Malaysia and the repayments of such loan are a tax-deductable expense, so we will not be required to pay excess tax.
- The borrowers don’t need to share any profit whereas only principle and interest are required to pay by them to the bank.
- We can also negotiate the repayment holiday at the starting of the loan. By this, the capital repayment will get frozen, and we just need to pay interest for a certain time period.
- Bank doesn’t keep an eye on the activities, which are running with the use of loan amount, so we can pay attention to goal with ease.
There is no doubt that bank loan is beneficial for the borrowers, but there is also a flip side, which can’t be ignored. Along with the benefits, borrowers also have to undergo some drawbacks, which may create some issues. Here are a few disadvantages of taking the bank loan –
- The process of approving the loan application is not a cakewalk as there is a requirement for many papers and mortgage. In case, there is no asset then loan approval is next to impossible. However, there is also an option of unsecured loans, but these loans are given at the higher interest rate.
- When the borrower gets the loan with a variable interest rate then evaluating future payments is a daunting task. Well, the interest rate changes according to the conditions of the market, so the amount of repayments fluctuates.
- If the borrower is willing to repay the loan amount before the time, then he/she may have to pay a certain fee.
All in all, it is crystal clear that advantages overweight the disadvantages, so we can get the bank loan when there is an urgent requirement of finance.