The system of loan has wide range of history. Starting from the olden days there is a concept of lending and borrowing. Money Lender will help the people who are in need of money in a critical situation. Money is the ultimate source of every person in this world. People say that the world is operated by money. Especially in our life we can’t survive without having sufficient money. The basic needs of a human being are food, clothes and shelter. A man can survive in this world if his basic needs are fulfilled without fail. How it is possible to have all the basic needs supplied without fail. The answer is in money. I don’t say that money is everything but we need money to live. Money is not everything of our life but money is something in our life. Human life has become to such scenario that without money no one can survive peacefully in this present world because food, clothes and shelter are sold for money we can’t get these things freely.
Every person has to face some any urgent situation that needs money immediately. We can’t change this by any means. This is quite common for all the people. No one would want for some urgent situations or emergency situations but it does happen in everyone’s life at times. For those who have urgent situations and if they don’t have money in their hand, what would they do in the end? What is the final option given to them? Borrowing is the final solution in this situation. The MoneyLender or the company is called lender and the one who gets money from them is called borrower. The process of lending money to the needy or the borrower for any rate of interest is called as loan. It is otherwise called as credit.
Loans by Banks and Finance companies
There are financial bodies called banks they lend money to the needed people. The borrower can avail loan from public and private banks and also from the finance companies. Banks are usually authorized and regulated by Government financial authority but financial companies do not have any authority for them, they do their own rules and regulations for giving loans and for the repayment of loans. The rate of interest charged by banks will be low comparing to the private finance companies where the rate of interest is high.
Types of loan systems
Loans are actually classified into different types based on the purpose like education, buying home, for marriage, etc.
Mortgage loans are the loans given to buy homes.
Automobile Loans are given to the person who planned to buy any type of vehicles.
Educational loan is for students for their educational purposes, it may be degree or any other courses.
Personal loans are given for person who does not mention the actual purpose to the banker but the bank includes marriage, home renovation, repayment of previous loans, etc. under personal loan category
There borrowers should provide proper proofs and documents to the Licensed Money Lender to avail the loan. The document should include the income proof, security and proofs for personal details like identity and address proofs.