The procedure of loans involves many steps including the loan payment, the abuses in lending the loan,the Income from discharge of indebtedness etc.
These procedures are explained here.
Bank Loan Procedure In India
Payment of the loan amount:-
The first and the foremost step involved in the loan procedure is the payment of the loan. The most complicated loan payment type is a fully amortising payment in which the each monthly rate has the same value over time.
Abuses in lending the sum of money:-
The second step involved in the procedure of loan is the abuses in lending the sum of money, predatory type of lending is one type of abuse related with the grant of loans. This usually involves the granting of a loan in order to put the person who borrows it in a position such that one can gain a benefit over him or her much easily.
where the person who lends the money is not authorized, there may be a condition called loan-shrink that is likely to cause in such situations. another form of abuse related with the lending of a loan is a usury. In usury, the lender charges more or more than enough rate of interest from the borrower. in different-different periods of time and the cultures the acceptable rate of interest varies from no interest to be payed at all to an excessive amount of interest to be payed.
companies that issue credit cards in some of the countries are found to be accused by the consumer related organizations related with lending at unserious rate of interests and trying to make money at an excessive rate of charge. abuses can also be of the type in which the borrower starts abusing the lender and does not repays the loan amount with an intention to de-fraud the person who lends him the money.
lending and borrowing if not signed with an contract or a collectoral are always associated with a great risk. one should be careful while lending or borrowing from someone and must read all the conditions of the contract between them before going for a loan.
Income made by the discharge of indebtedness :-
the third step involved in the procedure of loan is the income by the discharge of indebtedness. though a loan does not begin with an income to the borrower, but it becomes an income to the borrower if he is charged of indebtness i.e. if the debt is charged, he is eligible to receive an amount equal to the amount of indebtness.