Credit, as we have seen before, is just an agreement between two parties where one is the creditor and the other is the debtor and today we will also look at the loans directly from the debtor or the borrower. So at the beginning, we need to understand that the debtor is the one who borrows money and promises to repay it in one or more payments.
He needs this money for a particular case, whether it is to start or grow a business, or simply to buy consumer goods or make more purchases, such as a mortgage loan or a car loan. This consumer takes credit because either he is unable or unwilling to collect money and believes that obtaining a loan will be a much better option, as he will be forced to pay this monthly payment, but when the money has to be collected before the purchase, it is much more difficult to do this because self-discipline is lame for most people. When a loan is signed and a contract signed, it sets different points on what the debtor and creditor have the right, and what the interest rate, the penalty interest is, and how the loan is disposed of if the debtor stops paying the loan.
The main thing that the borrower has to pay is the interest on the loan, because they determine how much money he will have to pay each month and over the year on top of this borrowed loan. Of course, other conditions are also important, but they usually do not affect this total repayment price as much as this interest rate does. A person who wants to take a loan would of course not like it, but he understands that he has no room for choice, and if he wants to make money then he has to either collect, earn or take credit.
And the credit here is the fastest option, so it is often the people who choose it. If a loan is taken, it means that the money will have to be repaid after receiving the money and therefore the best ways to take the loan are those where the money is used for business creation or how you save money differently. For example, if you still have an old washing machine that spends a lot of water and electricity, taking a loan for buying a new and economical washing machine would be wise because you will save electricity and water every month and are also likely to save on clothes and maybe even spend less powder.
These savings are likely to be too low to repay your monthly loan, but they will be enough to make you feel like it! But even better ways to get a loan are if you want to start or grow your business, because, in this way, you will get extra money, of course, if you succeed, and you’ll be able to repay the loan faster and get further profit from the profit. increase. Anyone who takes a loan must understand that when he does, he takes the risk, because no one can ever predict what will happen in the future, and so having a loan needs to think about what you would do if you suddenly lost your job or if your salary were reduced.
And it is especially important for quick loans, where all the money in the loan is usually returned in one payment and therefore if you do not get the money for the given time then you will not be able to return it to the creditor and it can start to pay the penalty interest.
If you take short-term loans then this risk is less, but if you engage in long-term credit, then the risk increases in proportion to how long you will have to pay the loan. If you take a mortgage for 20 years, there is a good chance that at that time something will happen to you that you might miss a payment. These can be medical problems or job losses or simply unforeseen expenses that cannot be postponed. So be careful and remember that the creditor earns money from you, so even if you think that the loans are very profitable then think about how then the lender can earn you and then think again or you should or should not take this loan!