Every human being needs some things to survive in the world including the bare necessities of life. In days gone by people used to exchange commodities within a barter system to meet their daily needs. In a barter system people that had, for example, vegetables would trade their excess vegetables for another commodity that they did not have, such as grain. But as the economic system of the world evolved a simpler medium of exchange was introduced; coins or money. Various types of monies and currencies are being used in the world today. Every region and country has their own currency of trade. This has simplified the process of buying and selling.
However, unlike commodities which people used to grow or make themselves, today one cannot make money and fulfill his or her requirements. You need to work in order to make money. Rendering your services to others, doing a job or running a business are a few of the ways of earning money in the world. But this does not end the frustration of dealing with the financial system as most people do not have the exact amount of money he or she needs. Your income may be less than your spending, meaning that your cash inflows and outflows mismatch leading to a gap representing a shortage of money. In such scenarios where income is not sufficient to cover the requirements, people opt for borrowing money from others. You can ask your family members like parents, siblings or extended family to help you out in times of financial distress or you can turn to friends and co-workers, but asking for money from other people is perceived as a shameful act in most societies. As it is a risky business, most people shy away from lending money to others. This is where financial institutions like banks and lending companies can save the day.
They offer a large number of loan products that have different requirements, rates and terms and conditions. The issue of cash flow shortages is not restricted to individuals only and businesses can suffer from the same problems when they run short of working capital. They, too, can turn to financial institutions to borrow money and then repay the lump sum or arrange to repay in installments. Mostly business entities prefer arranging short-term loans. There are many different types of loans they can choose from. 12 Loans are very popular these days. The application process is pretty simple. After approval you are given a specific amount of money and an agreement is signed. The loan can be both secured and unsecured. You will pay back the amount along with a set amount of interest, which is the price set by the lender. The loan repayment is generally on a monthly basis over a period of 12 months. There are also other short-term loans that can help meet your borrowing needs. Depending on your requirements there will be one suitable for you or your business.