Are loans a good or bad thing?

Hello There!

A loan could be either a good or a bad thing, it really just depends on the person and how they're going to use the loan.

Good thing about loans:

-To the loan lender (person giving the money)

The lender doesn't really need the money that badly if they're willing to give out money. Banks are mostly known for giving out loans They could make more money than they give out; by the amount of interest they charge If a person can't pay off the loan, the item that they put as collateral could be taken by the lender and be sold; the profit from the sell will go to the lender

-Borrower (Person receiving the loan)

Has more money to access. Can get a lot of money for a pretty cheap monthly price. Lender could possible write off the debt of the person if they're unable to pay off the loan.

There are many good reasons to loans for both the lender and the borrower. Loans have many benefits if both parties agree to make sure that the contract of the loan stays even and works out at the end. That meaning that the lender makes more money than what they originally gave, or lend, and the borrower getting a lot of money instantly.

Bad things about loans:

-For the lender

There's a chance the borrower can't pay back the money on time, or in full, meaning that the lender would be losing money. The lender could possibly go bankrupt if they give out too much money and people don't pay them back.

-For the borrower

There could be a chance they can't pay off the loan, and assets would be taken from them because of collateral. They would pay more than what they asked for, due to interest. If they lend too much, people wouldn't really want to do business with them, specifically talking about companies looking for people like investors.

Even though there are good things about loans, there are also a lot of bad things that can come from loans, which is not beneficial to both the lender and borrower. It really depends if the lender gives out too much money, or the borrower doesn't pay back the loan in time and in full.

There are good and bad things about loans. But like I said earlier, it really depends on the person. If you are going to be a borrower and get a loan, I recommend that you have a plan on how you're going to pay back the loan, and how much money your going to take out of your income to pay that loan. If you have a plan on how you're going to pay back the loan, then you should be fine since you already know how much and when you're going to pay off the loan. Planning ahead of time when you get a loan makes the loan a really good advantage.

Here is a tip that I can give you about loans. DO NOT get a loan unless you know you're going to pay it back in FULL. Loans are a debt magnet if you can't pay it back in full and on time. If you know you can't pay the loan back, don't get it, just save up money from your income to pay for whatever you need to pay. Another tip I can give you is that you should NEVER get a loan for an unnecessary purpose. If you're getting a loan because you wanted to get really nice shoes for $700, don't do it, that's not playing smart. Just save up for whatever you want and get whatever you want with the money you saved it, you would be saving money since you're not going to be paying interest. If you get a loan for an unnecessary purpose, you're just making the lender make more money.