A few points on loan
In the present day globalized world where consumer market economy is the name of the game, it is only too natural that the want, the need as well as the desire of the common man will simply go on increasing by each passing day. However, it is quite interesting to note that very often people do not manage to arrange the necessary means to fulfill the need want or desire as they literally fall in the trap of the eternal binary of unlimited wants and limited means. But, the most significant fact amidst all these is that very seldom, the unlimited means result in an unfulfilled need or want and that is mostly because of a phenomenon we all know as loan.
To put it in very simple terms, a loan is basically a kind of a credit which involves a financial transaction between two parties namely the lender and the borrower and an agreement of reallocation of the money over a given period of time. An important aspect of this process of loaning is the interest, which is the additional amount of money, to be returned to the lender along with the principal amount calculated at a certain fixed rate over the period of time taken for paying back. In fact, the concept of interest can be described in terms of a cost paid for the service rendered by the one who is lending the money. While initially the practice was to borrow from individual money lenders often referred to as loan sharks mainly due to the exorbitant rate of interest that they used to charge, according to the present day set up it is the responsibility or rather the task of the financial institutions such as banks to provide loans to their clients for various purposes.