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Earning money through lending

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Gabbar

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You all must have been aware of lending money business as most like to borrow money for there needs and they don't mind paying a higher rate of interest if formalities are less
And this helps many to make good money from Interest they get from lending.

What are your views about it? Please share.
 

DGStaff

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#2
You all must have been aware of lending money business as most like to borrow money for there needs and they don't mind paying a higher rate of interest if formalities are less
And this helps many to make good money from Interest they get from lending.

What are your views about it? Please share.
I call these type of lenders legal loan sharks. They know that your resources may be limited on finding a loan, and these lenders also are taking a higher risk on you because you may not be able to obtain a loan through other sources, and therefore, the person that borrows the money will get super high-interest rates, in some cases, this can be as much as 100% or more.

and if you are running some type of lending business, then this is a risky business simply because the people that you loan money too will be a very high risk, and a good percentage of your borrowers may go into default, and not pay you back, and that is one reason you have to jack up interest on everyone in order to minimize your losses from those borrowers that go into default.
 

Gabbar

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@DGStaff These are prevalent in India and many other countries since a very long time and yeah in some cases they charge a bigger Interest rate but these days there are many who are taking 15-20% and providing money to those who require with less formalities.
 
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This is mostly done by financial institutions and banks and it a good way of making money especially if the borrower is credit worthy. I recently approaches a bank for small loan for my fish farm business the interest rate discouraged me. Lenders sometimes seem greedy and outrageous with their interest rate but it might be better if one present a collateral.
 

Gabbar

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We have many lenders here who can provide you loan at Rate of Interest of around 15-20 % and its higher in some cases with no or less paper work.
 
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Getting money at a very interest doesn't seem worthwhile to me,if the interest isn't 5% then I wouldn't need such a loan.Repaying back a loan is most times the hardest thing.
 

Gabbar

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Getting money at a very interest doesn't seem worthwhile to me,if the interest isn't 5% then I wouldn't need such a loan.Repaying back a loan is most times the hardest thing.
I think these days you can easily get loan by paying 10-15% Interest Rates. It's not desirable to take loan for every other thing but sometimes it's better to borrow funds and use it effectively in our business.
 

moh254

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This is mostly practised by bank of finance companies. The interest you pay is usually their profit. This kind of business is good but just like any other investment, you're required to be a risk taker. This is because some people will refuse to repay their loan.
 
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