Different Factors – Loans
Most of the banks, financial institutions, private financing agencies, money lenders provide loans to corporates, partnership firms, sole proprietors and individuals for their different requirements. The important factors these lending agencies look into while giving loans to the different customers is the safety of the loans lent. Safety first is the most important principle most of these financial institutions follow while giving loans to the customers. When a banker given loan and cash advance to the customers he gives it in the hope that the money advanced by him will be returned back by the persons concerned. The repayment of the loans by the customers depends upon the person’s capacity to repay, it also depends on the persons willingness to repay, it also depends on the income generating capacity of the persons concerned. The banker or financial institution should therefore take out most care in ensuring that the enterprise or business for which a loan is sought is a sound one. The banks and financial institutions should also assess whether the borrower is capable of carrying it out successfully. The business of giving loans by the banks and financial institutions carries with it certain inherent risks. It should be noted that the banks and the financial institutions cannot take undue risk while giving loans.