There are several reasons why people take loans. Loans are often regarded as goods or services taken or gotten on credit with the intention to pay later.
- The advantage to the borrower is as He or she get or obtain the funds (loan), the loan can be used to complete the task to which the borrower want to use it for or what they want to purchase.
- On the lender side, the advantage in giving out loan is that they will get income in the form of the interest and finance charges that goes along with giving a loan. The loan therefore is simply an investment to them.
Loans are often taken by people to buy expensive items, or to make a down payment to cover a part of the purchase price.
Conclusively, There are several conditions to be considered before a lender can borrow money or for getting a loan approved such as collaterals, evidence of income etc.
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