What is a loan? A loan, in simple terms, means financial assistance. Now the question may arise as to what is the purpose of a loan. The reasons for availing paskolos vary from individual to individual. However it is indisputable that one has to take a loan to survive in today’s materialistic world. There are various types of loans for various types of uses. The financial institutions too very aggressively do marketing of their loan products as this is their modus operandi for survival. Thus you can see the irony. For someone, availing a loan is essential for survival and for some, granting a loan is necessary for survival. The common factor in both cases is survival at any cost. Between the process of availing and granting loans, the economy of a country survives. Loans are business contracts and like any contract, they are bound by certain terms and conditions. The cost of living in today’s world has become exorbitant. One has to avail financial assistance to procure even the basic necessities of life.
At the same time, one has to see that the loans are repaid on time and with interest. This keeps the wheel of economy in running condition and the country thrives as a whole. Any spoke in the wheel can only disrupt the economy as a whole. Default of loans can be due to various reasons. The default could be intentional or circumstantial. Circumstantial defaulters can be nursed back to financial health whereas intentional defaulters have to see the stick of the law. The country should have adequate powers to punish such defaulters severely so that any other defaulter would think twice before he defaults intentionally. Thus it has been established that loans are the backbone of the economy in general. A stronger backbone means a stronger economy and thus a stronger country.