In Retail Lending, we have Secured vs Unsecured lending.
In Secured lending, we have three categories.
1) Asset Based: Products like Auto, Equipment, Used Vehicles, and Consumer Durables (where the value of the asset is used to finance the loan)
2) Margin Based: Gold, Shares – check the current rate and give a certain % of the value of the asset
(The difference between an asset and margin-based is the value of the asset keeps changing in the Margin based)
3) Cash Flow Based: Working capital, Term Loans, Housing Loan, Loan against Property (Can be viewed as an Unsecured loan + Collateral. Cash flows are the primary recourse to the repayment of the loan)
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