Over the past few years, senior secured bank loans have come torepresent one of the world’s fastest-growing capital markets. Between
1996 and 2007, the bank loan market posted a 33% compounded annual growth rate as measured by loan assets outstanding, and as illustrated in Figure 1 below.
At nearly $1.1 trillion, the bank loan market is now larger than the high-yield corporate bond market.

Several factors have contributed to this dramatic growth: the spread of syndication among banks made larger by mergers, increased
interest and participation by a wide array of non-bank institutional investors, and increased liquidity as a result of standardized disclosure,
trading, and settlement practices. More recent contributors to growth include the proliferation of collateralized loan obligations (CLOs)
and heightened M&A activity, particularly in the form of leveraged buyouts. Th e recent sub-prime induced turmoil in the credit markets,
far from reducing the attractiveness of bank loans, may actually have created opportunities for savvy investors. Th is paper summarizes
some of the reasons for investing in bank loans, both in the near-term and over the long haul.

Bank loans are available in many forms and for many purposes. There are secured as well as unsecured personal loans. This will result in people applying for loans accordingly. Secured bank loans will include the individual submitting any kind of collateral to the bank. The banks will accept the collateral based on the amount of money that the borrower is taking.

The collateral could be anything from a home, to a car to jewelery. Depending on the loan amount, the bank will demand the individual for an asset of any kind. The lender will then give them a percentage of the value of the asset. They will not give the 100 percent loan amount, unless the borrower has a good track record and he also has a good asset.

This is very rare, and most of the time people can avail about half or otherwise depending on the bank. This will give a little more freedom to the borrower when it comes to repayment options, as they have the asset with them. They will sell the asset only after a certain period of time if the borrower is not paying up.

This will also happen only after the bank has given enough notice to the borrower to repay the amount for the bank loan. The time period will also vary from bank to bank and the type of asset. In the case of homes, they will get more time than other assets. Borrowers should then at this point of time ensure that they could pay back the amount at the time of the loan sanction.

They can also compare interest rates with as many banks as possible before applying for the secured bank loans. The banks may also be checked for the rules and regulations that they have for the secured loans.