Question

What is the difference between a loan and a bond?

Answer 1

The difference between a loan and a bond are:

i) Bonds are usually issued to raise large amount of funds from from public. Bonds are traded in bond markets.
ii) Loans are issued by banks and are not tradable.
iii) In case of bonds, the interest rate is usually fixed for a period of time. However, in case of loan the interest rates can be fixed or variable (that changes with the change in base rates).
iv) Bonds will generally have less risk, unsecured loans will have high risk.