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Question

Banking And Insurance Question on Loans

State two advantages and two limitations of bank loans.

Answer

Advantages:

  1. Access to Funds: Provides necessary funds for personal or business purposes.
  2. Lower Interest Rates: Loans typically have lower interest rates compared to other financing options.

Limitations:

  1. Repayment Burden: Fixed monthly repayments can strain finances.
  2. Collateral Requirement: Most loans require collateral, which might not be available to everyone.