why condition like intrest rate, time,guaranter,mortage,etc. are essential for loan?
Answers
Answer:
Note:- These are both economical and personal points of view
Interest Rate = Interest helps to make the risk of default worth taking. It's the amount of money the lender charges for giving the money to the borrower. It's necessary because the amount of money you are giving away can be high. So basically for a span of time, you aren't able to use or possess that money.
Time = It's totally essential because if the borrower is not truthful or requires more time than he should take, you have a risk of getting back your money.
Mortgage = I personally support this point. When somebody is taking a loan, he should give an equally valuable amount as a mortgage. Because, If due to some reason he doesn't return the money back, you have his possession which he will certainly want to take back.
Now I also want to highlight one fact supporting those, who are financially backward. Poor people should be given less interest. If he is BPL, they shouldn't be charged with interest. Now in the case Of Mortgage, take whatever they can give, because they don't have the condition of giving something valuable. This is the biggest problem these days' poor people face. Many people take huge interests from them, which is beyond reasonable. This should be stopped.
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