Financing Is Debt And Vice Versa
Money is never free, quite logically because it is the medium by which many things are valued. One has to earn the money in some way, and then buy what one needs or wants with it. Sometimes there are things that you need or want but do not have the money for at the moment. You know that saving up is the best way to get that money, but you also cannot wait that long for your savings to build up. Thus you ask for some money from someone, and thus accrue a debt to be paid at some future time. This has been a practice since the beginning of civilization, and continues to be a fact today. Debt is inevitable, especially when financing some purchase to satisfy conditions. installment loan play on the strengths of financing, by providing access to money from the borrower and from which the lender can profit, albeit the returns are periodic.
An Equal Exchange
The idea of a loan is built on the concept of equal exchange. Though in the end a debt from a loan will be repaid with more than it was originally worth, the borrower gains the advantage of time. One could think of the interest as a price to pay for not waiting to save up the required amount of money. This is part of the equal exchange one deals with in loans and debts. Installment loans are as such, as they provide the money now, which will be paid back part by part over time, with attached interest for services rendered. There are many types of these loans, some are short-term, to be paid in a few weeks, while others can take a few decades to pay off. Having access to a significant amount of money as you need it is incredibly useful, as it could save your life or improve it when used correctly.