Difference Between Grant And Loan
The main dissimilarities or difference between grant and loan can be pointed out as follows:
1. Introduction
Grant: Financial aid provided by the government, private corporation, educational institutions or other organizations as a gift.
Loan: Lending of money to individuals or business firms by banks or other financial institutional for personal or business purpose.
2. Repayment
Grant: It is a kind of gift. So, recipient does not need to repay.
Loan : It is lending of money for the certain period. So, it should be repaid after certain period.
3. Payment Of Interest
Grant: It is not interest bearing
Loan: Fixed rate of interest should be paid
4. Acquiring Process
Grant: It requires long and complex process to acquire grant
Loan: It can be acquired easily as compared to grant
5. Purpose/Objective
Grant: It is provided for special purpose like education, medical purpose etc.
Loan: It is provided for business or personal purpose
Also Read:
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6. Refund
Grand: It should be refunded if the recipient could not meed the condition
Loan: Not required
7. Risk
Grant: There is no risk
Loan: Risk exists
Grant Vs Loan (Comparison Chart)
I hope this post is helpful to understand the difference between grant and loan and to make comparison between them.
Grant Vs Loan (Comparison Chart)
Basis For Difference
|
Grant
|
Loan
|
Introduction
|
Non repayable financial aid provided by the government
|
Lending money by banks or financial institutions to individuals or firms
|
Repayable
|
No
|
Yes
|
Interest Bearing
|
No
|
Yes
|
Acquiring Process
|
Complex
|
Simple
|
Purpose
|
For social welfare
|
Personal or business purpose
|
Risk Involved
|
No risk
|
High risk
|
Refund
|
May be
|
No
|
I hope this post is helpful to understand the difference between grant and loan and to make comparison between them.
