Purpose
There are two purposes for a loan secured by debt. In the first purpose, by extending the loan through securing the debt, the creditor is relieved of most of the financial risks involved because it allows the creditor to take the property in the event that the debt is not properly repaid. In exchange, this permits the second purpose where the debtors may receive loans on more favorable terms than that available for unsecured debt, or to be extended credit under circumstances when credit under terms of unsecured debt would not be extended at all. The creditor may offer a loan with attractive interest rates and repayment periods for the secured debt.
Read more about this topic: Secured Loan
Famous quotes containing the word purpose:
“It is not the purpose of literature to purvey news. For news consult the Almanac de Gotha.”
—Herman Melville (1819–1891)
“Satire exists for the purpose of killing the social being [for the sake of] the true individual, the real human being.”
—D.H. (David Herbert)
“Civilization is a process in the service of Eros, whose purpose is to combine single human individuals, and after that families, then races, peoples and nations, into one great unity, the unity of mankind. Why this has to happen, we do not know; the work of Eros is precisely this.”
—Sigmund Freud (1856–1939)