With loans we face all the time and know the good side of these services, but today I will try to look at what criticism is associated with these loans and why credit could be a bad thing, as well as how these loans could badly affect both individual borrowers and the overall economy.
Simple financial experts believe
Many economists and simple financial experts believe that credit, both in individual and corporate terms, is a bad thing, and, for example, in Islamic culture, up to this day, interest-bearing credits are considered bad and are therefore banned. Credits can lead to different risks, but usually the greatest risk is that the monthly income of a person will decrease and therefore monthly loan payments will make up too much of the monthly budget and thus prevent a person from living a financially independent life.
And for those loans with too high a percentage of their issuers, or creditors, they are usually called fruit growers, thus indicating their evil intentions and people’s bruising. Usually, fertilization occurs when the creditor receives too much profit if it is compared to the risk that he assumes by lending that money to his debtor.
If we are still talking about housing and consumers
People usually borrow money with the idea that their earnings will remain at the same level as they are now or will increase and so when the income falls due to job losses, illness or other unexpected expenses, credit payments remain too high.
Such over-indebtedness has many and different bad effects for people starting with stress, getting new jobs, and aggravating relationships, because money problems are usually one of the biggest problems that cause couples to divorce and family members.
Common instability of your life and your future
And, of course, such credits also cause uncertainty about yourself and the common instability of your life and your future. Credits are also blamed for various macroeconomic changes and even crises, because, for example, before the Great Depression in the 1930s, public as well as private loans had remained too large and people were simply no longer able to borrow extra money, which also led to economic shrinkage. increase in new credit costs.
And so, until all these loans were paid out, or at least a large part of them, economic growth could not continue. The overuse of credit is associated with various economic bubbles, such as the housing bubble in 2008 and the stock bubble in 2001. And looking at such criticism,