17:33 26 March 2013
A loan refers to the money borrowed from financial institutions like banks or other lenders for a specific purpose. This must be repaid on or before the agreed deadline otherwise, the borrower will incur penalties or additional interest.
With the current economic condition, taking out loan is something that became a norm for a lot of people. You see, income hasn’t been increasing for years while prices kept soaring high.
For this reason, people are usually cash strapped and are forced to borrow money in order to finance their needs.
Below are the top 3 reasons why people take out loan:
1. Debt consolidation. People usually take out small loans from different lenders. This becomes complicated overtime as borrowers need to pay different people and/or institutions on different dates of the month.
To make it organised, they are given the option to take out fresh, bigger loans to repay the smaller loans.
2. For cosmetic surgical needs. The world is getting more and more critical these days. Most often than not, if you want to advance in your chosen career or if you want to attract ideal partner in life, a good physical appearance is a pre-requisite.
Thus, some people take out loans to remove scars on their faces or to fix broken tooth, just to name a few.
3. For business purposes. A lot of people want to start their own business but they just don’t have the capital. So, they go to the banks or lending institutions to get started.
Established business people also do this if they want to expand their business or if they want to venture into another kind of business.
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