In shakespeare's play Hamlet, polonius has this piece of advice for his son: "Neither a borrower nor a lender be"
A young person would have a very difficult time in today's world trying to live by this precept of long ago .
Credit, the borrowing and lending of money , is a key part of the modern business and personal world.
Banks, savings and loans, insurance companies , credit unions, and finance companies are the principal lenders of money.
People have many different purposes for borrowing money. An individual purchasing a home finds it almost mandatory to secure a real estate loan that requires 20 to 30years for repayment. Buying an automobile is generally the most common need for a loan and these are repaid in one to four years. The cost of a loan is called interest, and the amount varies with the type of credit.
The ability to repay is a major question for any borrower.
Those who repay as agreed keep their credit rating good and are able to borrow again.
Borrowing money is a matter of trust between the people negotiating the loan one of the reasons the use of credit has grown to such high levels is that most people are trustworthy and honest.