Distinguish, differentiate, compare and explain what is the difference between Bond and Loan. Comparison and Differences.
Differences between Bond and Loan
|1||Bonds can be sold by governments or firms.||Loans are taken out by firms and consumers looking to borrow money.|
|2||Interest rate are usually fixed on a bond for the period of bond.||Loans can be of fixed rate, but often are variable - changing with basic rates.|
|3||Bonds can be sold on bond market to public / financial institutions.||Most loans are given by banks.|
|4||Bonds are often bought and sold on bond market. Value of bond can go up and down.||Loans are usually fixed with original bank.|
|5||Examples: 10-year US Treasury bond.||Examples: Variable bank loan.|
|6||Govenment bonds yields likely to be lower interest rate and are seen as safe investment.||Bonk loans on unsecured lending can be quite high.|
Similarities between Bond and Loan
Both are methods for firms or government to borrow money. The firm / government will pay annual interest rate payments on both bonds and loans.
Difference between Loan vs Bond
Bond vs Loan
Differences between Loan vs Bond