Pls tell/guide me on Interest on Unsecured loan means? which loan is called Unsecured loan ? who needs to take this type of loan ? while Create a new business we need some capital to start it, so we collect it from friends,relative and others who is near to us.if this capital called unsecured loan ? and also pls tell me if their is change in this when Business is Propritership or Partnership.
Pls guide in this matter and additional to it if i missed to ask.
13 August 2009
Unsecured loan is the one which is take without offering any assets as security. Thus, in case of default by the borrower, the lendor has no asset backing so that he can dispose them and make good his loss.
Unsecured loan can be take by any one if the lendors are willing to give the money as unsecured loan.
Unsecured loan differe from capital. The amounts introduced by the partners / propirator / share holders will ke treated as capital. Any amounts introduced by other persons who are not partners / propierator will come under loans. Depending on security cover, these loans will be further clasified as secured or unsecured.
If unsecured loan is differ from capital why we are giving interest on it to IT dept. ? & when we have to paid this loan or when we can revalt the entry ? How we can make the entry of Unsecured loan interest. where we have to take the entry ? i.e pls show me the entry of Unsecrued loan interest. Does it increase the Unsecured loan amount ? or not ? and last Please tell me what is the important of Unsecured loan rather than any other loan ?
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