Introduction
Every person has a different understanding of the term “lending”. In simpler terms, lending is the process where a lender (a person) who has surplus hard cash gives to a borrower (who is in need of money) and the borrower pays interest to the cash provider in the form of consideration. Then, the borrower has to repay the hard notes with a specified amount of interest to the lender within a stipulated time period. Lending mobilizes the money in the economy from those who have surplus money or are willing to give loans to those who are in need of money. Money lending helps the country reach the heights of prosperity and growth. It is a well-established fact that every person needs credit for development, and no individual is self-sufficient in credit for development purposes. As a result, a lending company extends credit to the person in need of hard cash. This article gives a general overview of the functions of a lending company.
Process of lending company
The institution which provides money to a person on certain terms is known as a lending company. It is to be noted that these institutions are different from banks and financial institutions. These institutions can be approached by a person who is in need of hard cash, and they are requested to fill out a form with particulars of information. On the cash provided by the company, a person needs to repay the amount of cash with a specific charging rate at a later specified time. Sometimes, Lending company Manila also approach people who have a high net worth to lend credit to these institutions.
Lending company vis a vis economic growth
Lending companies help the economy increase its growth rate, GDP, and standard of living. For instance, if a person wants to start a business and has not enough money to start, and if there is no money lending, then how will he start the business, and will it lead to unemployment and a decrease in the growth rate of money? So it is difficult to imagine their lives without money lending. Benefits when he provides a loan to the borrowers; his money multiplies with time, and he also charges interest on the loan.
Functions of the lending company
The lending company provides credit to the person from their own funds or the amount of money they hold with itself. These companies provide people with the agreed rate of interest between the institution and the people. The lending company must provide the loan with their own funds, but it can be sponsored by a maximum of nineteen people.
Elements to consider while choosing a lending company
The person should choose a lending company according to the amount of money or cash needed by them. The other thing that people should compare is the charging rate of the money. If the lending company charges a higher rate of interest, then an individual should shift to another company that has a reasonable charging rate.
Conclusion
A lending company provides loans to people at a specific rate of interest. It is different from firm financial institutions and banks. The purpose of these companies is to only provide loans and hard cash to the person concerned and not carry on other businesses.
