Bank Loans

Bank Loans: The Nutrition of Individual Loans – Can Banks Raise Interest Rates Sometimes?

Shahnaz Chowdhury, a resident of Dhanmondi in Dhaka, took a loan of Tk 3 million from a private bank in 2016 to buy an apartment at 9.5 percent interest. But a year later, the bank reduced its interest rate to 12.5 percent.

“When I go to a bank branch and complain, they show me the condition in the paperwork that the bank can change the interest rate at different times. As a result, I had to accept that, ”said Mrs. Chowdhury.

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Many people want to take a loan from a bank for personal, family or business needs. Public-private banks in Bangladesh have also made their lending process much easier.

But just as there is a lot of hassle before taking a loan, some people fall into danger like Miz Chowdhury even after taking a loan due to ignorance.

What are the things to keep in mind when taking a bank loan? Its details are given in this report:

What are the issues considered by the bank for lending?
Former banker Nurul Amin told BBC Bangla: If a customer can prove that the purpose for which he is seeking the loan is correct, he can repay the loan on time with interest, then the bank agrees to give him the loan.

Talking to officials of public-private banks, it was learned that there are some general conditions for giving loans.

As the borrower has to be above 18 years of age, he has to have a regular income. Banks lend to a person depending on his ability to repay the loan.

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Depending on how much money the borrower borrows, his or her income surplus, or ability to repay the loan.

Income surplus is the amount of money a person earns after paying income tax or other loan installments. Although it varies from bank to bank. But most banks assume the ability to repay loan installments up to 50 percent of this income.

According to that ability, the bank lends him money.

For example, after paying income tax, a person’s monthly income is 50 thousand rupees.

The bank will calculate that it has the capacity to repay the loan of Rs 25,000. From there you may have to pay five thousand rupees a month as a loan installment.

Now the bank will allocate him the amount of loan so that the amount of his monthly installment including interest and principal will be within 20,000 rupees.
It also takes into account the person’s past debt repayment information, whether there is any other loan in another bank, what other assets are, type of job or business, etc.

Banks give special priority to professionals such as government employees, doctors or engineers. Again, there are some professions where the bank is careful in repaying the loan.

Md. Shams-ul-Islam, managing director of Agrani Bank of Bangladesh, told BBC Bangla: At the same time, we are considering how much his business is contributing to the country’s economy. ”

As stated on the Mutual Trust Bank website, in order to take a personal loan, the customer must have one and a half years of working experience or two years of business experience. In the case of government employees, the minimum salary should be 18 thousand rupees, for private employees 30 thousand rupees. If you are a businessman, your income should be 50 thousand rupees.

However, if you want to take a loan to buy a house from this bank, the minimum salary of a government employee should be 25 thousand rupees, 40 thousand rupees for a private employee, and 50 thousand rupees for a businessman.

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What kind of loans do banks give?
Banks in Bangladesh offer various types of loans under various names. Such as personal loans, travel loans, tuition loans, doctor loans, marriage loans, car purchase loans, house/apartment purchase loans, etc. Apart from this, there are various types of loans for business, SME loans, agricultural loans, loans for industrial plants, etc.

The bank roughly divides these loans into four parts. Such as secured loans, non-secured loans, SMEs or agricultural loans, and corporate loans.

Personal loans are non-secured loans, for which no collateral is required. However, many banks have guarantors. Car, flat, etc. are considered as a mortgage or secured loan.

Apart from this, SMEs can be either secured or non-secured. Agricultural or industrial loans are common mortgage loans.

There are some specialized banks like Bangladesh Krishi Bank, Krishi Unnayan Bank, which lend only to professionals in certain sectors.

For example, Prabasi Kalyan Bank, Shilpa Bank, Karmasangsthan Bank give loans only for the purpose or for the purpose for which the charter was created.

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