What do Lenders get from personal loans
If there is someone who would most benefit from a small business loan aside from the borrower himself, he would be the lender. The reason why the finance industry is a big hit especially for people who are strategic enough is because of the fact that people could gain a lot from this industry. But to be specific, what do they gain from lending someone money? What do they actually get from it if they can get something at all?
There are two important things that lenders are able to earn from lending someone money. One of the said things is the interest that is applied to the monthly payment of the loan. In approving the small business loan, there are terms that both the lenders and borrowers have agreed upon. And one of this is the interest rate that would be added when the borrower starts to make the payment. Another thing they earn from this industry is an asset in the form of collateral. This is for the lenders of secured loans who would require collaterals first before giving the approval on the loan. If the borrower would not be able to pay for the loan, the lender has the right to claim the asset as his own to pay off the small business loan that the borrower failed to accomplish. These things are capable enough to keep the industry alive and active in the market.
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