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What else can I help you with?
What happens if a bank defaults?
If a bank defaults, it means that the bank is unable to meet its financial obligations and may not be able to repay its depositors or creditors. This can lead to a financial crisis, loss of confidence in the banking system, and potentially require government intervention to stabilize the situation.
When filing for a bank overdraft what do the bank check for?
Your income & your ability to repay the money provided as overdraft
What does it mean when banks are insured by the FDIC?
Banks that are insured by the Federal Deposit Insurance Corporation are insured against loss as a result of the bank defaulting or otherwise being unable to repay a customer's money.
What happens if a bank goes bankrupt and how does it impact customers and the financial system?
If a bank goes bankrupt, it means it is unable to meet its financial obligations and may be closed down. This can impact customers as they may lose their deposits if the bank is unable to repay them. It can also have a ripple effect on the financial system, causing instability and potentially leading to a domino effect on other banks and institutions.
Is the amount charged for use of bank's money is called interest?
Yes. The amount a bank charges you for using their money is called an interest. This facility wherein you get to use the banks money and repay them is called a Loan. The bank grants you a fixed amount as loan and you repay them every month along with an interest.
What happens when a bank goes under and how does it impact its customers and the financial system?
When a bank goes under, it means that it is unable to meet its financial obligations and is declared insolvent. This can impact its customers by potentially causing them to lose their deposits if the bank is unable to repay them. It can also have wider implications for the financial system, as it can lead to a loss of confidence in the banking sector and potentially trigger a domino effect of other banks facing financial difficulties. This can disrupt the flow of credit and money in the economy, leading to economic instability.
How bank earns?
Banks earn money by holding money you put into the bank and using it to loan to others. They then collect interest from that to support themselves and to repay you back.
Is an overdraft an advance?
Yes. Overdraft is like an advance where you take cash from your overdraft account (even though you do not have equivalent bank balance) and then you repay the money to the bank once you have raised enough funding to repay the same. The bank would charge you an overdraft fee + interest for the money you borrowed from them
What is the meaning of 'borrowing from banks?
Borrowing from banks refers to the operation when an individual borrows money or takes a loan from a bank. The bank lends the individual money and this person will repay the loan to the bank. For ex: If I wanna buy a home, I will take a home loan from a bank and buy the house. Then I will pay my mortgage every month for the next few years and repay the money I borrowed from them.
If the customer is unable to repay the loan amount in what way the bank helps him?
Actually No. if the bank officers are considerate enough they might give you a little bit extra time when compared to other defaulting loan customers. If you are not able repay the money you owe them even after the extra time, the bank will take possession of your assets and property like house/car etc. and then arrange to sell them to raise cash to pay for the loan amount you owe them.
What happens if you can't repay a personal loan?
It depends on the situation. In many cases they can take you to court and get a judgement against you. That would allow the bank or other institution to seize your property ( house, cars, etc.) and sell them to raise money to repay the debt. They could also garnish your paychecks.
What happens to your money in the bank?
your money is problably not kept in the bank but its loaned to other banks and other banks loan to your bank
