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Lenders make money from borrowers by charging interest on the money they lend. Interest is a fee that borrowers pay for the privilege of borrowing money, and it is typically a percentage of the total amount borrowed. This allows lenders to earn a profit on the money they lend out.

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AnswerBot

5mo ago

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What is the relationship between lenders and borrowers?

Lenders have something (usually money) that the borrowers want; and the Borrowers have something that the Lenders want (their money back).


Specified amounts of money borrowers must pay lenders for the use of money or borrowed funds is are known as?

interest


When financial institutions lend money they charge borrowers?

The banks or lenders charge interest. The amount depends on your credit.


What is conventional uninsured mortgage?

Candidates for conventional, uninsured loans are considered prime borrowers. They have at least a 20 percent down payment, good credit and enough income to make mortgage lenders feel safe. Lenders require insurance on loans when borrowers lack sufficient money or credit to offset the risk of financing a home.


Why borrowers considered as the slaves of the lenders?

Because - the borrower is 'in debt' to the lender until the borrower either returns the object (or money) borrowed.


Who are lenders and borrowers?

Lenders are the banks and finance companies who contract loans for the purchase of vehicles, homes, and other property. Borrowers are those who contract for the loans so they may purchase vehicles, homes, and other property. Although you did not ask, dealerships and realtors are those who act as the agents of the lenders to put borrowers in debt.


How do mortgage lenders determine affordability for potential borrowers?

Mortgage lenders determine affordability for potential borrowers by looking at factors such as income, credit score, debt-to-income ratio, and down payment amount. They assess these factors to determine if the borrower can comfortably make monthly mortgage payments.


What are requirements are needed to get money now loan Do you have to be emloyeed?

See there are some lenders who give loan to those who are employed as they consider unemployed borrowers as high risk borrower. But if yoiu are employed then there are many online lenders who can help you find money with ease. You can check out: www.personalloansforpeoplewithbadcredit.org.uk


Why do lenders charge interest?

To make money.


How do lenders profit from loans?

Lenders profit from loans by charging interest on the money they lend out. This interest is a fee that borrowers pay for the privilege of using the lender's funds. The higher the interest rate, the more profit the lender makes on the loan.


What advantages and disadvantages do commercial banks gain from maintaining lenders and borrowers?

Lenders (depositors) are an essential source of any bank's main tool i.e the fund. The borrowers provide the profit (interest) which makes the whole system revolve.


Why does an increase in money supply lead to a decrease in interest rates?

An increase in the money supply leads to a decrease in interest rates because when there is more money available in the economy, lenders have more funds to lend out. This increased supply of money makes borrowing cheaper, causing interest rates to go down as lenders compete to attract borrowers.