As we all know, in today's world there is a huge demand for money for setting up a business, market, shops and many other things. If you have a good credit history, a steady source of income, and a stable financial situation, you may be eligible for a bank loan. Banks offer loans to their customers to meet various personal or business needs. Banks usually lend money under the guise of lending it to a business or an individual as a security deposit for a mortgage. Once the loan is extended, the borrower has to repay it with interest. Thus, borrowers who are looking for loans normally do so with the intention of repaying them in time. An Example of How It Works Let’s take an example of how bank loans work. You want to open your own restaurant and need capital to get it off the ground. A bank is willing to lend you that money as long as you can show them that you will be able to pay back the loan in full and on time every month. However, once they see red flags in your financials lik...