A money lender is a person or a group who lends money for a certain interest, to his borrower. The borrower has many options to get his loan from. He can get loans from banks, from friends, from established financial institutions and from Licensed Money Lender. While choosing from the various options, he should give priority to sources which provide him money that would be advantageous to him.
- The first choice for any person should be from his own savings and surplus funds. As surplus funds are set aside to meet emergencies they should be given top priority for any expenditure.
- If a person does not have sufficient resources, he can borrow money from his family. By giving them an assurance of repaying the loan, he can borrow from his own kith and kin.
- If his family members are unable to provide the required amount, he can seek assistance from his friends. But the borrower should keep up his promise and pay back the loan amount totally or in small installments. If he does not keep his promise, he will not get any assistance from his family or friends.
- Banks are the next option to get loans. As banks provide loans at reasonable rates of interest, they help the borrower in times of need. But they require collateral to help the borrower with the required loan.
- Money lenders are the last option for any borrower to get his loan from. As they charge a higher rate of interest, they should be the last option and they should be paid off as early as possible. Authorised people such as Licensed Money Lender are better options, when compared to unlicensed money lenders.
- However, the best option is to avoid borrowing money.