Question

how are high interest rates on loans harmful ?​

Answer 1

$\huge{\bold{ANSWER:-}}$

CONSEQUENCES ARE :-

• Most of the informal lenders charge a very higher interest on loans.

• This means , the cost to the borrower of informal loans is much higher.

• A larger part of the earnings of the borrowers is used to repay the loan.

• Hence , borrowers have less income left for themselves.

• This could lead to increasing debt.