Borrowing and loaning money have become part of society nowadays. When you need some money, you can borrow to your friend, company, or bank. When you borrow the money, of course, you need to return the money back. When you start the business, ideally you can make profit by using money that you borrow before you returned the money. We don’t realize that when we returned the money back, we actually give some profit to the person that loan you some money. Most people don’t even realize that by loaning money, you can get also the profit. Bank will loan some money that doesn’t belong to them. For most of us, loaning the money means taking cash and loaning to the others. Most people only think that when you loan some money to the other, possibly you can only have same amount of money. Then, how to get loan profit? How much loan profit that can you get? Basically there are three possible opportunities in loaning the money that possibly will give you loan profit. We are going to discuss those three possible ways.
Three Possible Ways to Make Loan Profit
Before we discuss the three possible ways to make loan profit, you need to understand that everything will have some risks. Loaning money also has some risks. So you have to be ready in case that you have to bear the risk. You have to understand that using this ways don’t mean that you will always get loan profit. However, if it works, it will give the loan profit.
The first possible way is using social leading sites. Social leading site will try to connect you with people who want to borrow some money. Social leading sites also will set the interest rate that you will get when someone borrows your money. Usually these social leading sites will provide interest rate that is better than borrower get from a bank, so it will attract the people to visit the sites. Commonly, most social leading site will set interest rate in the range of 12% for loans made through their service. This loan profit then will be shared to the loaners. For you who are interested to join social leading sites, it is better you really understand the guideline and learn about the risk. You should also choose the good and trustworthy social leading sites. You can read the review of each site to determine whether it is trustworthy or not.
The second possible way is by loaning money to friends. Commonly this way is less profitable than using social leading sites. When you decide to loan money to friend, sometime it becomes less formal. It means that you don’t have to think too much about the interest. It is not a big deal if you only loan small amount of money, but it will not be good if you loan big amount of money. However, if you want to get loan profit, you need to make more formally. It means that you have to get rid of melancholic feeling because it is your friend that borrows your money. You need to discuss the interest rate and due date with your friend. It is probably will be smaller compared with using social leading sites. You need also to know whether your friend that borrows your money will use the money for consumptive or productive purposes. It is better if you loan the money for the productive purposes. However, you have to know also the business that your friend do, whether or not it provides profit for him.
The third possible way is by using the some companies that provide micro loan to poor people. This way is less profitable compared with the two other ways because usually the companies will set small interest rates for the loan. However, it still will give you some loan profits. This way is also considered risky way.
Basically those three ways are considered risky ways. When you loan the money, the most possible risk that you can get is that the person who borrow you money cannot return the money. It means you will probably lose your money as well as the loan profit. Sometime it is also difficult to bill the money due to the condition of person who borrow you money. That is why you need to carefully set the agreement in the beginning of the process.