A Loan Company is a financial institution in principle whose main motive behind operating, is to provide finance facilities to the public. It could be by way of loans or advances or otherwise, for any activity other than its own (excluding equipment leasing and hire-purchase activities).
A loan is in principle a kind of agreement wherein the lender temporarily lends property, in most cases cash to the borrower, with a promise that the borrower will return it along with the interest rate mentioned in the terms and conditions of the loan agreement.
Loan companies have several types of loan offerings depending on the borrower’s preferences. A loan could be:
- Demand loan,
- Term loan,
- Secured loan,
- Unsecured loan,
- Industrial loan,
- Commercial loan, and
- Agricultural loan, etc.
These loan companies are in most cases the small partnership firms that accept deposits from the public at high-interest rates and use this money to further give loans to the:
- Small scale firms, and
- Self-employed persons, etc.
At a relatively higher rate of interest.
The loan company does do any business activity that is performed by either the hire-purchase company or the equipment leasing company. Despite the fact that the mode of operation of these companies is somewhat similar, but their business activities are entirely different from each other and alongside their funding requirements vary significantly.
Some of the Loan Companies :
- Reliance Finance Company
- Mudra Finance Company Private Limited
- ICICI Home Finance Company Limited.
- Bajaj Financial Services
- Sun loan
- Tata Capital
- HDFC Financial Services
There are a whole lot of companies out there, you can find more information about them and the Loan Companies with a simple Google Search.
With the developments in IT and Financial Sector, the Loan Companies are digitizing their loan dispersal process with speed.
Read More: Low interest rate Loan companies