Baghdad – INA – Amna Al-Salami
Today, Tuesday, the financial advisor to the Prime Minister, Mazhar Muhammad Saleh, revealed the types of loans granted to citizens and companies, while explaining the repayment mechanism for each loan.
Saleh told the (INA): “A loan is an amount of money borrowed by an individual or company from banks or financial institutions, in order to manage planned events financially, and thus the borrower bears a debt and must repay it with interest within a certain period of time.”
He pointed out that “banking applications appear within the scope of granting loans. The subject of the so-called (term loan) is a cash loan that is usually repaid in regular payments over a specific period of time. Loans usually last between one and ten years, but they may continue for a period of time.” Up to 30 years in some countries.
He added, “The term loan usually includes an unstable interest rate (also known as floating), which may add an additional balance to be repaid,” noting that “economic life includes financial deficit units willing to invest that borrow from surplus units, who are the depositors in exchange for… Interest paid by the borrower to finance an investment project or a specific economic activity in the fields of housing, industry, trade, agriculture, or services. This is what is called bank credit, which is the essence of the banking process.