Low Interest Loan
A low interest loan is a type of debt. Like all debt instruments, a low interest loan entails the redistribution of financial assets over time, sport ween the lender and the borrower, but with low interest. The borrower of the low interest loan initially receives an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a minimal cost, referred to as interest on the low interest debt.
Acting as a provider of low interest loans is one of the principal task for financial institutions. For banks low interest loans are generally funded by deposits. For other institutions issuing of debt contracts, such as bonds is a typical source of funding.
The bad behavior e in the granting of low interest loans is known as predatory lending. It usually involves granting a low interest loan in order to put the borrower in a position that one can gain advantage over him or her.