Money has allowed humanity to achieve a level of success and innovation that our ancestors would see as alien or supremely advanced. In the past, survival was the priority, and the energy humans spent hunting, either meant they ate that day or they didn’t. However, as we evolved, we learned that we could trade something and get something else in return without having to spend much energy at all. This became the modern-day money that we use. In this article, we will discuss financing and loans, and how they help us or hurt us in our lives.
Loans and Financing
As mentioned in the introduction, money has become a transfer of energy. Something you did in the past allows you to carry that action on pieces of paper or digits on a computer screen, that say you can get something else for it. We buy and sell things this way, but what happens when we don’t have enough money to purchase the things we want? We take out a loan.
There are many different types of loans, but one of the most used kind of loan is the home loan, or mortgage, which is a very popular loan industry investors San Diego CA. In the United States, this is the way in which people secure a house for themselves, because though they make enough money to make the payments, they don’t have a large lump sum to buy a house outright.
There’s other types of loans as well such as personal loans, car loans, and student loans. The way we finance these loans is by getting a background and financial credit score check done by the person or institution giving us the loan. They want to make sure we can pay it off or else it goes into default. For bigger loans such as a car or home loan, the lending institution will also ask for a down payment to have “skin in the game”. This prevents the person receiving the loan from running away with the asset because they’ve already committed their own money as well.
If you have good credit, a stable income, and a good personal track record, it shouldn’t be too hard for you to get a loan. The requirements will vary depending on who is lending you the money, but the previous three are most often looked at first before discussing terms, interest, etc.
In conclusion, we have discussed how we as a species came to understand finances and why we sometimes need loans to propel us forward in our life. Another term you should research on your own is the word “leverage” because most wealthy individuals use loans to get hold of bigger assets that produce enough income and can pay the loan itself. Finances, money, loans, leverage, these are all things we don’t learn in school and have to learn on our own. You should continue educating yourself to reach all your financial goals.