Lending: subtleties, advantages and features

Some say that loans are evil and should not be taken under any circumstances. Others pay off several loans at the same time and believe that buying something on credit is quite normal.

Let’s figure it out. What are the pros and cons of a loan, and when is it justified to use borrowed funds, and when is it not worth doing?

Loans: main features

Different bank offers have their own characteristics. But the essence of the lending service is the same: the client borrows money from the bank for a certain period of time, for which he pays interest. The most popular are consumer loans – relatively small amounts that the borrower receives for his household needs (purchase of equipment, repairs, payment for studies, etc.).

Mortgage loans are also popular – after all, saving up for housing on your own is very difficult. Loans can be targeted or non-targeted. In the first case, the bank issues money for certain expenses specified in the contract (for example, for the purchase of an apartment) and makes sure that the funds are spent on this. A non-targeted loan can be spent on any purchases – the bank has no control over this (the main thing is that the borrower makes payments on time), but the interest rate on it is also higher.