Make Money by Taking a Loan

Money making from a loan is a practice followed by many lenders in their local markets. The earnings are real good. Only you need to have some reputation in the market, or just people must know that you are a lender.

Everyone need money at some time or the another. Their are circumstance at which a person is tempted or forced to borrow money from someone. But this force to borrow money can be utilized to make some bucks.

Some time back I discussed about the case about my home maid, where she had borrowed money from a local lender at very high interest, just because of the fact that she is illiterate and don't want to get into the mess of banks.

This thing has many positive outcomes for the lender. The lender can utilize the reluctance of the money borrower to his advantage, by taking a loan at small interest and lending it at a much higher rate.

The steps required for money making from loan are:-

1. Ensure that there is a local market for lending in your area, i.e. some people prefer to take money from local lenders as compared to banks or other authorized lenders.
2. Do some advertisement for your business as a lender. This will attract the potential customers in your area.
3. Whenever some one comes to you for a loan, if you have the amount with you, then you can lend him at your desired rate of interest. Usually this rate is negotiable, and depends upon the bargaining power of both sides.
4. If you do not have the money with you, ask for a processing time for a day or two, and apply for a loan from a bank or another source from where you can borrow money at much lesser rate of interest.
5. The target is to borrow the money at a lower interest and lend it at a higher interest, thereby making a source of income.

This is a very big business today, local lenders try to keep their customers with them. And the customers also wish to stay with local lenders as they are scared of the official paperwork and mess.