Simple-interest loans are used for houses, cars, education, boats, airplanes and other large purchases. Once the loan is signed, the buyer starts using the item and begins paying for the rented money until the loan is repaid. The rental rate for money is agreed to by the buyer and lender. A house loan (mortgage) may […]
Category Archives: Interest Rate
Business of Lending Money
Money-lending is a business. Can’t believe we have to say that, but we do… and it’s the simple truth. Lenders need to be repaid more money than they lent out – or else there’s no point to being in that business. The original amount of money you borrow is called the ‘principal’ and the extra money […]
Borrowing money is risky
Most people take 15-20 years, accumulating enough wealth to pay for a house. If people had to save enough money to pay for an entire house before getting started, they wouldn’t be able to buy one when they need it. That’s the need to borrow money when buying something really expensive – this borrowed money […]