Nowadays people prefer to buy most of the things on loan. Whether homes or mobile phones. Many financial institutions promote loans and give many offers. They offer zero percent finance on loans. Even a businessman raise the loan to increase his business; to increase his profits then he raises the loan to buy raw material and to upgrade the technology.

Auto loans are always taken to buy a vehicle. People buy the car from dealerships. When people already arrange a loan from outside vendors to buy a car is called outhouse finance. Not only cars people also buy auto-rickshaws, cranes by the number of loans.

Loans

Loan means to borrow money from any financial institutions or from money lenders. Loans are of different types like

  • Short term loans
  • Long term loan
  • Secured loan
  • Unsecured loans
  • Debt consolidated loan
  • Fixed-rate loan
  • Variable interest loan

These all are the loans taken by people for different needs. If you want to borrow money then you should decide first which type of loan you want to take. People take home loans to construct their homes and students take loans for further study. Even the interest rate for a study loan is very low.

Pledge

People take loans and for security, they pledge their assets. The borrower signs the one document and give his asset and borrow the money. In assets, they can pledge their assets like cars, motorcycle etc. saloon pledge (รับจำนำรถเก๋ง which is the term in Thai) is done by people who want to borrow money. and people prefer expensive cars for pledge because if a borrower fails to repay the loan the lender will forfeit his car. And they have security until they repay the amount of loan. In case of pledge assets, there is a negotiation between the lender and borrower

So, people are taking the benefit of loans to run their business. Even farmers take loans to buy tractor and trolleys, machines, seeds etc. And small industrialists take loans to upgrade their types of machinery and technology. They extend the business and increase their capital by taking loans.

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