Preferential loan is an excellent funding option

Lending and borrowing has become a diversified field. It is no longer a one man show in the community who ruled the market. Loans have broken all the financial barriers and are self sufficient profitable institutions or units in a financial set up. There are ranges of loans available in the market. One of which is preferential loans. This loan may not be popularly known but has a huge amount of benefits attached mainly with respect to the lack of interest rates charged. This sort of loan is extended for a particular purpose. It can be a loan provided by the employer to an employee or his family for their personal work or commitments with low or lack of interest rates charged. The preferential loans can also be a government subsidy or initiative to promote and increase capital investments in unemployed or under developed regions, again at very low interest rates.

Such loans if extended by government is majorly utilised for progressing a under developed region. The grants are provided to the business units to expand and generate more employment and also increase monetary inflow in the region. Such type of loans is also linked to tax exemption most of the times. On the other hand in case the edullista lainaa (preferential loans) extended by the employer to the employee are majorly in addition to the salary offered. Most of the times these loans do not hold any cash value, but are subjected to income tax. This form of a loan can be:

• Cash benefit for personal use
• Benefit in kind e.g. employee receives benefits for purchase a car or provisions for accommodation
• Other benefits like a holiday voucher, payment of bills etc.
This type of loan is basically a small benefit relief to the society on the whole or to an individual for their personal purposes.