Introduction to Types of Loans

The money that consumers and businesses place in banks, savings and loans, and credit unions does not sit idle. These institutions lend money to a wide variety of borrowers for a wide variety of purposes.

The fact that money can be recycled through lending keeps the economy strong and growing. Individuals use borrowed money for consumer goods. Businesses use borrowed money to expand operations. In general, borrowed money fuels the economy.

However, too much borrowing and failure to repay can be very dangerous. A wise investor knows the pros and cons of borrowing and keeps it in check.