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Midterm: Lesson 4 Types of Loans (Offered by Banks) : Activity #1

This document discusses different types of loans offered by banks. It identifies 7 main types: 1) real estate loans, 2) financial institution loans, 3) agricultural loans, 4) commercial and industrial loans, 5) loans to individuals, 6) miscellaneous loans, and 7) lease financing receivables. It also outlines the 6 main steps in the lending process that banks follow when providing loans to customers.

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Dianne Jane Liray
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69 views2 pages

Midterm: Lesson 4 Types of Loans (Offered by Banks) : Activity #1

This document discusses different types of loans offered by banks. It identifies 7 main types: 1) real estate loans, 2) financial institution loans, 3) agricultural loans, 4) commercial and industrial loans, 5) loans to individuals, 6) miscellaneous loans, and 7) lease financing receivables. It also outlines the 6 main steps in the lending process that banks follow when providing loans to customers.

Uploaded by

Dianne Jane Liray
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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MIDTERM: LESSON 4

Types of Loans (offered by banks)

VIDEO LECTURE LINK: https://drive.google.com/file/d/17R1itS9-


IkoWkODX8KOXOdlJY5BUh-wh/view?usp=sharing

ACTIVITY #1
NOTE: SUBMISSIONS IS VIA GOOGLE CLASSROOM, IN ITS DESIGNATED
CLASSWORK
EXPLAIN THE PHRASE: “If you owe the bank Php10,000, that's your problem. If you
owe the bank 1M, that's the bank's problem”.

Lending to businesses, governments, and individuals is one of the most important


services bank and their competitors provide, & it is also among the riskiest as the recent
global credit crisis has demonstrated.

TYPES OF LOANS
1. REAL ESTATE LOANS- are secured by real property like land, buildings and
other structures. It includes short-term loans for construction and land
development. It also includes longer term loans to finance the purchase of
farmland, homes, apartments, commercial structures and foreign properties
2. FINANCIAL INSTITUTION LOANS- include credit to banks, insurance
companies, finance companies and other financial institutions
3. AGRICULTURAL LOANS- are extended to farms and ranches to assist in
planting and harvesting crops and supporting the feeding & care of livestock
4. COMMERCIAL & INDUSTRIAL LOANS- granted to business to cover acquisition
of inventories, paying taxes and meeting payrolls
5. LOANS TO INDIVIDUALS- include credit to finance personal
purchases/spending. extended directly to individuals or indirectly through
retailers.
6. MISCELLANEOUS LOANS- include all loans not listed above, including
securities loan
7. LEASE FINANCING RECEIVABLES-where the lender buys equipment or
vehicles and leases them to its customers.

STEPS IN THE LENDING PROCESS


1. Finding prospective loan customers
2. Evaluating a prospective customer's character and sincerity of purpose
3. Making site visits and evaluating a prospective customer's credit record
4. Evaluating a prospective customer's financial condition
5. Assessing possible loan collateral and signing the loan agreement
6. Monitoring compliance w/ the loan agreement & other customer service needs.

REFERENCES:
Alminar-Mutya, R.F. (2017). Introduction to Philippines money, credit and banking.
Mandaluyong City: Anvil Publishing, Inc.
Laman, R. M., Laman V.B., and Evia, E. P (2014). Financial system, market and
management. Manila: GIC Enterprises & Co. Inc.
Medina, R.G. (2014). Money, credit and banking. Manila: Unlimited Books Library
Services & Publishing Inc.

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