The Money Lender is a person who usually provides cash for short-term as a loan. The borrower borrows money from a money lender and in return for the loan amount pays an interest for the loan. The money lender is the most-sought-after person in any country. The role of a money lender keeps increasing in this world of financial crisis and high security in banks. There are many advantages and disadvantages of getting loans through a money lender.
Pros of Acquiring Loans from a Money Lender
The money lender provides loans to everyone for all types of credit. His only requirement for all his loans is the collateral, which he gets as security against the loan provided by him to the borrower. Getting a loan from a money lender is easy and involves a very quick process. There is no significant verification done regarding the financial position of the borrower, as the borrower has already provided the collateral as security. There are many people who are unable to get loans from banks and financial institutions and they find it very useful to go to a money lender to get loans. Since getting loans from banks involves a lengthy process and a longer waiting period, many prefer to get their financial assistance from money lenders.
Cons of Acquiring Loans from a Money Lender
The money lender provides loans only against good collateral. If the borrower is unable to repay the loan, he will lose the asset rendered as collateral. He will have to pay a high rate of interest, which may sometimes be more than the principal amount if the duration of the loan is extended.
Though there are many negative aspects connected to the money lender, they are some of the most important people who keep supplying financial assistance to many people.