Loan Terms and Schemes Selection-Golden Gate Properties

Choosing of loan schemes depends on many factors. Decisions may become difficult when factors like bank and tenure are considered. Many loans are a long term contract between the bank and the client with many implications and hence the borrower must be very careful about the selection of the loan scheme. Tenure is nothing but the loan period. Loans may be of long term, short term or medium term which is solely the customer decision. If a long term loan is selected the borrower will be bind up for a longer period of time but at the same time prepayment of the loan shall be made without any penalty issues. Floating rate products are to be chosen for longer tenure because the high interest rates will not be sustainable. At times when the interest rates are really high short term loans are to be preferred. Schemes are defined based on the nature of interest whether fixed or floating. Interest rates are fixed at the time of taking loan in fixed type. On the other hand while a floating rate loan is considered interest rate is related to the present market rates or a bench mark rate.