09:16 26 July 2013
Government initiatives to bring in credit to help boost the economy has done mortgage lending much good as lending activities reached its peak from the banking crisis in 2008. However, small business showed less enthusiasm for borrowing to finance their floundering businesses.
A loan is a type of debt that is levied with a certain per cent of interest. There are a number of reasons why individuals get loans – they need or want something right now but do not have enough cash on hand to pay for it.
Different types of loans have been designed to address specific needs. Student loans have helped thousands of students get higher education that could jumpstart them to a better life.
Immediate need for mobility can be solved by taking on a car loan. Individuals or families wanting to settle more permanently in their dream homes can look into home loans. Personal loans can make your dream vacation or dream wedding come true. Businessman wanting to expand or modernize their business can consider getting a bank loan to bankroll expansion and modernization.
Whatever type of loan you decide to take, some serious thoughts should be given to factors such as: how much money do you need to borrow, what is the length of payment period, interest rates, reliable source of monthly income from whence the loan amortization will come from, the reputation of the lender, and penalties for late or non-payment, etc.
Most importantly you must remember that the loan plus the interest charges will have to be paid in due time. Borrowers begin having problems when they fail to pay their monthly payments as they are slapped with late payment charges and compounded interests.
To maximize the benefits of a loan, make sure that you use it for the original reason it was taken and that monthly payments are paid unfailingly.