Four Ways in Which Lenders Protect Their Interests

The Lending Business
How do lenders protect their interests? This is a question that comes up frequently wherever banking courses are taught. We all know that the business of lending people money is a risky one. There is always the possibility of people borrowing money, and then disappearing – never to be see again. Then there is the possibility of lending people money, only for them to fail to repay because of unavoidable reasons such as illness. So, given these very real possibilities, how do lenders protect their interests? Well, there are some four key ways in which the lenders ensure that their interests are well protected. Firstly, the lenders undertake lots of background checks, to ensure that they only lend money to people who are creditworthy. They look at things like a…
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