Hey,
There are two types of loans, they are open-ended loan and closed-end loan. The application process for both of them is the same. You will need to submit the necessary documents as proof and property as collateral for secured debt. Take a look below to know more details about the same.
What is an open-end loan?
These are loans that don't have a definite ending date. Banks provide borrowers with this loan after thoroughly verifying the repayment ability of the customers. A few popular examples of open-ended loan are lines of credit and credit cards.
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Open-end bridging loan are pre-approved by banks. The borrower can avail of all the benefits of an open-end loan till a specific dollar limit. The borrower then needs to subsequently pay the amount taken in the credit loan.
Here are some points on open-end loan vs closed-end loan :
open end loan definition :
|
closed end loan
|
These loans don't have a specific end date. These are not given to borrowers for any specific purpose. |
These loans have a fixed end date and are given for a specific purpose. The borrower needs to pay the loan amount including interest and maintenance fees. |
These loans are distributed with preapproval. |
These loans are not distributed with preapproval.
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These loans are preferred by borrowers because they get more control over the line of credit. |
The line of credit is set by the lender in the case and the lender continues to have final control. |
eg.credit cards, home equity line of credit |
eg.auto loans |
This is all from my end on open end loan.
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Authors Of The Question
What is an open end loan ?
sana
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2 Year
2022-06-29T19:38:29+00:00 2022-07-04T10:15:32+00:00Comment
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