Reasons for Taking a Loan

Before the Bank disburses the loan to the customer, of course, the Bank see in advance why the prospective customer needs Loans. This is indeed one of the process/requirements for the Loan that must be fulfilled either by the prospective customer before obtaining the Loan. For those of you who want to apply for a loan easily, you can visit You can also find out what kind of loan is offered by visiting the website.

Loans are a classic thing that is needed by many people and is encountered in everybody’s life. Some of them actually take Loans for investment purposes and some others do use Loans for consumption purposes. According to research from various sources, there are at least five things that can encourage prospective customers to apply for Loans are:

– Income Smoothing

Income smoothing usually happens because of the gap between income and expenditure. Usually, occurs in those who earn income at certain periods (not routine) such as farmers who will not have money until the harvest season comes when the need for money still running from month to month. During the next planting season, farmers need money for preparation for planting. For this reason, they apply for Loans to the bank

– Cash Flow Injection

Cash Flow Injection is the need for funds in the short term that usually occurs because of other business opportunities/business outside the business that is currently undertaken, so that required additional capital / fresh funds quickly in short time. Loans used for this purpose are usually only used in a short time according to the needs of the time.

– Emergency Relief

Being a financial backup (emergency relief), which is to address the sudden needs of event risk (family disaster, illness, natural disasters, layoffs, short-term and other short-term education costs). Case Loans on this basis are important as the poor generally do not have sufficient savings or insurance.

– Asset Building

Preparing funds for long-term needs (asset building). Objectives These loans are usually used to purchase fixed assets (household appliances, vehicles, farm animals, property and others) that have high economic value. In time, these assets can be converted back into money.