Question

What are the impacts of high cost of borrowing on the borrowers

Answer 1

If wages increase with inflation, and if the borrower already owed money before the inflation occurred, the inflation benefits the borrower. This results in less interest for the lender if the borrower uses the extra money to pay his or her debt early

Answer 2

Answer:

high cost of borrowing puts a psychological pressure on the borrower. if borrower able to repay the loan then he will become prosperous than before . if unfortunately borrower not able to repay the loan he would come to a debt trap from which recovery is very painful