Loan

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Loan

What is Loan? In finance, a loan is the lending of money by one or more individuals, organizations, or entities to other individuals, organizations etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that debt until it is repaid as well as to repay the principal amount borrowed.

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The document evidencing the debt (e.g., a promissory note) will normally specify, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and the date of repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the lender and the borrower.

The interest provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice, any material object might be lent.

Acting as a provider of loans is one of the main activities of financial institutions such as banks and credit card companies. For other institutions, issuing of debt contracts such as bonds is a typical source of funding.

Personal loan

Secured

A secured loan is a loan in which the borrower pledges some asset (e.g., a car or house) as collateral.

A mortgage loan is a very common type of loan, used by many individuals to purchase residential property. The lender, usually a financial institution, is given security – a lien on the title to the property – until the mortgage is paid off in full. In the case of home loans, if the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it. business loans, business loan lenders, business loan companies, top business loan lenders

Similarly, a loan taken out to buy a car may be secured by the car. The duration of the loan is much shorter – often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. In a direct auto loan, a bank lends the money directly to a consumer. In an indirect auto loan, a car dealership (or a connected company) acts as an intermediary between the bank or financial institution and the consumer.

Other forms of secured loans include loans against securities – such as shares, mutual funds, bonds, etc. This particular instrument issues customers a line of credit based on the quality of the securities pledged. Gold loans are issued to customers after evaluating the quantity and quality of gold in the items pledged. Corporate entities can also take out secured lending by pledging the company’s assets, including the company itself. The interest rates for secured loans are usually lower than those of unsecured loans. Usually, the lending institution employs people (on a roll or on a contract basis) to evaluate the quality of pledged collateral before sanctioning the loan.

Unsecured

Unsecured loans are monetary loans that are not secured against the borrower’s assets. These may be available from financial institutions under many different guises or marketing packages:

  • Credit cards
  • Personal loans
  • Bank overdrafts
  • Credit facilities or lines of credit
  • Corporate bonds (may be secured or unsecured)
  • Peer-to-peer lending

The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974.

Interest rates on unsecured loans are nearly always higher than for secured loans because an unsecured lender’s options for recourse against the borrower in the event of default are severely limited, subjecting the lender to higher risk compared to that encountered for a secured loan. An unsecured lender must sue the borrower, obtain a money judgment for breach of contract, and then pursue execution of the judgment against the borrower’s unencumbered assets (that is, the ones not already pledged to secured lenders). In insolvency proceedings, secured lenders traditionally have priority over unsecured lenders when a court divides up the borrower’s assets. Thus, a higher interest rate reflects the additional risk that in the event of insolvency, the debt may be uncollectible.

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Demand

Demand loans are short-term loans that typically do not have fixed dates for repayment. Instead, demand loans carry a floating interest rate, which varies according to the prime lending rate or other defined contract terms. Demand loans can be “called” for repayment by the lending institution at any time. Demand loans may be unsecured or secured.

Subsidized

A subsidized loan is a loan on which the interest is reduced by an explicit or hidden subsidy. In the context of college loans in the United States, it refers to a loan on which no interest is accrued while a student remains enrolled in education.

Concessional

A concessional loan, sometimes called a “soft loan”, is granted on terms substantially more generous than market loans either through below-market interest rates, by grace periods, or a combination of both. Such loans may be made by foreign governments to developing countries or may be offered to employees of lending institutions as an employee benefit (sometimes called a perk).

Target markets

Loans can also be subcategorized according to whether the debtor is an individual person (consumer) or a business.

Personal

Common personal loans include mortgage loans, car loans, home equity lines of credit, credit cards, installment loans, and payday loans. The credit score of the borrower is a major component in and underwriting and interest rates (APR) of these loans. The monthly payments of personal loans can be decreased by selecting longer payment terms, but overall interest paid increases as well.A personal loan can be obtained from banks, alternative (non-bank) lenders, online loan providers and private lenders.

Commercial

Loans to businesses are similar to the above but also include commercial mortgages and corporate bonds. Underwriting is not based upon credit score but rather credit rating.

Loan payment

The most typical loan payment type is the fully amortizing payment in which each monthly rate has the same value over time.

The fixed monthly payment P for a loan of L for n months and a monthly interest rate c is: P = L ⋅ c ( 1 + c ) n ( 1 + c ) n − 1 {\displaystyle P=L\cdot {\frac {c\,(1+c)^{n}}{(1+c)^{n}-1}}} P=L\cdot {\frac {c\,(1+c)^{n}}{(1+c)^{n}-1}}

Abuses in lending

Predatory lending is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her; subprime mortgage-lending and payday-lendingare two examples, where the moneylender is not authorized or regulated, the lender could be considered a loan shark.

Usury is a different form of abuse, where the lender charges excessive interest. In different time periods and cultures, the acceptable interest rate has varied, from no interest at all to unlimited interest rates. Credit card companies in some countries have been accused by consumer organizations of lending at usurious interest rates and making money out of frivolous “extra charges”.

Abuses can also take place in the form of the customer abusing the lender by not repaying the loan or with an intent to defraud the lender.

United States taxes

Most of the basic rules governing how loans are handled for tax purposes in the United States are codified by both Congress (the Internal Revenue Code) and the Treasury Department (Treasury Regulations – another set of rules that interpret the Internal Revenue Code).

1. A loan is not gross income to the borrower. Since the borrower has the obligation to repay the loan, the borrower has no accession to wealth.

2. The lender may not deduct (from own gross income) the amount of the loan.The rationale here is that one asset (the cash) has been converted into a different asset (a promise of repayment). Deductions are not typically available when an outlay serves to create a new or different asset.

3. The amount paid to satisfy the loan obligation is not deductible (from own gross income) by the borrower.

4. Repayment of the loan is not gross income to the lender. In effect, the promise of repayment is converted back to cash, with no accession to wealth by the lender.

5. Interest paid to the lender is included in the lender’s gross income. Interest paid represents compensation for the use of the lender’s money or property and thus represents profit or an accession to wealth to the lender. Interest income can be attributed to lenders even if the lender doesn’t charge a minimum amount of interest.

6. Interest paid to the lender may be deductible by the borrower. In general, interest paid in connection with the borrower’s business activity is deductible, while interest paid on personal loans are not deductible.The major exception here is interest paid on a home mortgage.

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Income from discharge of indebtedness

Although a loan does not start out as income to the borrower, it becomes income to the borrower if the borrower is discharged of indebtedness. Thus, if a debt is discharged, then the borrower essentially has received income equal to the amount of the indebtedness. The Internal Revenue Code lists “Income from Discharge of Indebtedness” in Section 61(a)(12) as a source of gross income.

Example: X owes Y $50,000. If Y discharges the indebtedness, then X no longer owes Y $50,000. For purposes of calculating income, this is treated the same way as if Y gave X $50,000.

How to obtain a loan?

Grand City Investment Limited is a Licensed Money Lender that was incorporated in Hong Kong on MAY 29, 1984 with Company Registration No. 0137353 under  the  Money Lenders  Ordinance  (Chapter  163  of  the laws of Hong Kong). We are the premier provider of Trade Finance, Recourse Loan, Non Recourse Loans, Insurance, Investments, Wealth Management, Portfolio Management, Trade Platforms, Private Placement Programs as well as the issuance and monetization of Bank Instruments such as Standby Letter of Credit (SBLC), Bank Guarantees (BG), Tender Bond Guarantee, Advance Payment Guarantee, Usance LC, Letters of Credit, Differed Letters of Credit and International Project Financing for companies, SME’s and private individuals.

These Bank Instruments are issued through top AAA rated banks such as Citibank New York, HSBC Hong Kong or HSBC London, Barclays bank London, Standard Chartered Bank London, Dubai or Hong Kong, UBS Switzerland, Welsfargo Bank, Bank of America, Deusche Bank AG Germany etc.

Our bank instruments are cash backed and can be used for Discounting, Monetization and Private Placement Programs (PPP). They also can be used as collateral against a loan or credit line to secure Funding for Projects, as well as import and export transactions because many importers and exporters are always in need of bg bank guarantees as well as contractors, export finance, international trade finance etc.

These are the reasons why you should Work With Us:

At Grand City Investment Limited we value your time and get straight to the point. Some companies will talk your ear off, we believe that action speaks louder than words so we prefer to be solely focused on results. We have a large network of world class banks which gives us the unique ability to create outcomes others can’t. We have been in the loan and financial instrument industry since 37 years ago.

When it comes to issuance, leasing, funding and monetization of any bank instrument such as bank guarantee, standby letter of credit, bg sblc, getting to the finish line is all that counts and that’s what we excel in at Grand City Investment Limited. We have been successfully closing deals for over 37 years, show us another company in this industry that can match our record?

What drives us: We have a passion to help emerging and growing companies succeed and help investors realize their goals. So we are Driven by Passion and Integrity

Below are a few of the things that make us unique and different from other companies.

1. We are a Government of Hong Kong Licensed Money Lender that Is Legally Registered in Hong Kong since May 29, 1984, that is 37 years of successful service and excellence.
2. we issue bg, dlc and sblc from world class banks such as Barclays bank London, hsbc Hong Kong, Citi Bank, Credit Suisse, Standard Chartered Bank, Deutsche Bank or any prime bank of choice.
3. We issue bg sblc in both usd or Euro Currencies, if you pay in usd we Issue in usd & if you Pay in Euro, we issue in Euro.
4. Your Privacy is our Priority, we do not share your data or Business Transactions with third parties.
5. Since 1984 till date No Customer has ever had a failed transaction with us. We have 99% success rate.
6. Brokers Always Welcomed & Protected against possible circumvention.
7. We have solutions for every customer in every industry.
8. We are Efficient, Consistent, Transparent & Reliable
9. We are straight to the point
10. Experienced and qualified staff
11. Extremely Satisfied Clients

12. No prepayment penalty
13. Fast Approvals Closing

14. No Hidden Fees or charges
Therefore, if you are looking for Lease or Rent Bank Guarantees, bg, dlc sblc, L/C or loans and project funding then you have come to the right place. Kindly contact us today for all your financial needs.
NOTICE TO BROKERS/AGENTS/COMPANY REPS:  We value and appreciate brokers who are direct to their clients. New brokers are welcomed and compensated with between 1% to 2% commission on every deal. Here are a few of the many benefits of being a Grand City Investment broker:

 

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  • Professional Support for brokers
  • Earn between 1% to 2% Commission on Every Deal
  • No Broker Chains, So please Be Direct to your clients
  • Brokers are 100% Protected Against Possible Circumvention.
  • Wide Range of Financial Instruments to choose from such as bg sblc issuance & Monetization Programs.

Email: apply@grandcityinvestment.com | grandcityinvestment@protonmail.com
Telephone: +852 8191 7151
Skype:  dr.williams09787

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