Benefits of Lending
If you are starting a business, borrowing some money from a financial institution may be your first step. For those of you who only use a bank account for savings, it is advisable to find other ways of borrowing money. Small businesses often lend money from banks and pay on a monthly basis at an interest. Listed below are the possible benefits of lending money from financial institutions.
1. Mortgage loans
Most financial institutions today offer mortgage loans, which give consumers an opportunity to own homes. You can borrow a mortgage loan at low interest rates to buy a house/ property. Mortgage lending is however limited to high salary earners with good credit records. This does not necessarily mean you are not eligible; consult your bank on how to apply for a mortgage.
The use of credit cards is also lending to some extent and is a convenient way to get money for day-to-day expenses. You can use credit cards to buy stuff but you are required to pay back at a later date with interest. Borrowing money using credit cards may prove expensive especially when you indulge in luxuries.
3. Home improvement
Through lending, you can apply a number of loans provided you have good credit ratings. These loans range from large loans to personal loans for basic needs and home improvement as well. If you are considering home improvement or want to buy property, lending from your bank might be a viable option.
4. Builds rapport
Another benefit of lending from your bank is the fact that they know your spending patterns, and when you have a good credit history they will be more willing to give your larger loans. It is also practical to use one banking institution because it allows you to manage your accounts more easily.
Despite of having an array of benefits, lending large sums of money may prove disastrous when you are unable to pay on time.