The Evolution Of Loans & How They Have Helped To Survive
Did you know that there is evidence of loans being used throughout history? They have changed for the better since then, but the premise of borrowing money as a way of improving or sustaining your life has remained.
Nowadays, there are many different loans that you can choose from, whether that’s payday loans to help with an emergency expense, student loans so that you can benefit from an education, or car finance so you can get from A to B with ease. Read on as we look at the evolution of loans over time and how they continue to help those of us that are struggling to survive.
What is a loan?
A loan is used to lend money via either a financial lender or another person. The borrower (the person that is taking out the loan) will need to repay the lender the sum of the funds they’ve taken out with interest. When taking out a loan, the borrower will agree on a term to repay the loan back, which tends to be a sum of money each month – this happens until the loan is paid back.
Loans have been present throughout history and are still a great help to people in modern times – they come with a range of benefits that mean people can survive even when they are struggling to find funds to pay for some aspects of their lives. Below, we’ll look at some of the most popular types of loans available to us today.
Types of loans
- Personal loans: These loans can be used for anything you need – whether to pay for an emergency expense, home improvements, or a big event like a wedding. Depending on the lender and credit history, these loans have varying interest levels.
- Student loans: Many of us will be familiar with this type of loan – a student loan allows you to pay for university and other types of further education. They usually don’t require a credit check, and repayments are the same for everyone depending on income.
- Auto loans: This refers to any type of car finance that allows you to put down a deposit for a vehicle and means that you can borrow money to cover the cost of the car. You are required to make repayments over a set time frame, meaning you can benefit from a car to get from A to B without needing a lump sum.
- Payday loans: These loans are used when faced with unprecedented expenses. They are short-term loans that charge interest and must be paid back to lenders. They are based on the ability to make repayments rather than solely on credit score, but they can be more difficult to pay back.
Loans through history
So, where did loans begin? There have been examples of loans shown throughout history, although there is no sure date that loans started being used. Historically, farmers and traders used to lend and borrow grains, likely to be where loaning money stemmed from. Indentured loans were popular in the Middle Ages and were used so that rich tradesmen could borrow money for land or buy property. To pay this off, they would have to work on the lender’s estate to return the favour!
Banking also became popular throughout the Middle Ages as lenders realized that many people benefitted from access to loans to live – people even used to set up market stalls that acted as makeshift banks! Throughout time, banking has become more streamlined and secure so that we can all benefit from added funds as and when we need them.
Benefits of loans
There is a reason why loans are so popular nowadays and have been throughout history – they allow people to live safely and securely when they may not have a lot of money to help themselves.
There are a few benefits that come with loans, the first being that there is a loan suited to every circumstance – even if you have bad credit, you can find a lender specializing in loans for those who have struggled in the past. There is also a range of lenders that will base your loan application on your income.
Another benefit of loans is that they can help you pay emergency expenses. Not everyone has access to a pot of savings that they can use if something goes wrong, so knowing that there are loans out there that can help with expensive situations like a broken-down car, faulty boiler or medical bills is a huge relief.
Taking the time to find a loan that is perfect for you, your finances and your situation isn’t as hard as you’d think – there is a huge range of lenders that can suit a range of circumstances, making it easy for you to benefit when you need it most.
