Loans have been around for as long as most humans have. Loans are a method to acquire certain sums of money or goods by borrowing from an individual or an institution and agreeing to pay back this amount later with a rate of interest. Most loans that we see today are within the organized sectors, most institutions, and banks. The rate of interest offered across banks vary and can depend not on the institution that is offering it, but the sphere in which it is being used for overall economic conditions.
History of banks and the loan industry:
- The first loans were always given out by merchants for the sake of farmers and other product makers.
- This could be dated back to as far as 2000 BC where some of the world’s largest civilizations set up loan centres near areas that intersected major trade routes.
- In Greece and Rome, temples often served as the centres for financing activities. These temples used the money given out offerings as loans to businesses and charge them high rates of interest at a later stage.
- Most of what modern lending is today can be traced back to the Renaissance period in Italy. You had a handful of powerful families who controlled the financial scenario throughout entire Europe.
- The most famous bank of this all was that set up by the Medici in the early 1300s.
- The world’s oldest bank since those times has been kept intact and is still functional to this day. It is located in modern-day Florence.
- Loans as an institution became popular in the United Kingdom in the 18th century.
- Since the 2000s, the whole industry has seen a paradigm shift due to the multitude of technological changes that were happening.
So, if you are thinking about whether you should refinance home loan, you are becoming a part of a system that is steeped rich in history and has been here since some of the very earliest beginnings. While loans serve to ease a sort of financial burden from one’s life they come with obligations and rules of their own. Not following these are bound to get you legally prosecuted under different tenets of the law. It is always imperative that one thinks it over before planning to opt for a loan. Reading the disclosure document that comes along with it is also essential.