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What is Lien Banking & Offshore Banking?

Actually a "Lien" is a legal right granted by the owner of property by a law or otherwise acquired by a creditor. A "Lien" serves to guarantee an underlying obligation such as the repayment of a loan. If the underlying obligation is not satisfied the creditor may be able to seize the asset that is the subject of the "Lien"

"Offshore" bank is a bank regulated under international banking license (often called offshore license) which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to less regulation and transparency accounts with offshore banks were often used to hide undeclared income.

What is Lien Banking ?
Basically when someone takes out a size able loan as self desire such as garments or home or an auto loan, the lender often requires an asset that can held as collateral against the loan. Thus the collateral has a lien placed upon it. 

Example that 
Suppose someone takes out  $ 20,000.00 loan for a new home. As part of the loans terms the bank gets to hold the little to the home as a lien against the home until the loan is fully repaid. Should the borrower at any point default or refuse to repay the balance of the loan the bank  can use the title to the car to sell it in order to recover the money that was lent.

Why It Matters:
A lien protects lenders in the event of non-payment. Since loans with collateral are less risky for the lender, they can loan to lower interest rates for the borrower.

When purchasing a used home for example its important to check for liens against the vehicle. If there is an outstanding debt on the home the buyer runs risk of having it repossessed by the lender.

What is Offshore Banking?
Offshore banking to deposit of funds by a company or individual in a bank that is located outside the their national residence. Although the term implies that these banks are located on islands many offshore banks are in fact found in onshore locations such as Panama, Luxembourg and Switzerland. 

How do offshore accounts work?
Actually offshore banking involves depositing your money in a foreign country. Which is just like a insurance policy. For example a resident from the United States can choose to deposit his money at a bank located in the commonwealth of Dominica. Normally people choose to deposit their money in financial institutions offshore because their countries are unstable.

What are the benefits of offshore banking?
01. Financial security:- For starters offshore banking helps you to avoid monetary problems        resulting.
02. Diversify business investment :-  Offshore banking gives you the freedom to diversify            investment.
03. Banking privacy:- Most people prefer offshore accounts as they protect your banking            information.


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