Controversy And Criticism Over Loans

Whenever you are talking about loans, you are going to hear a lot of people taking about controversy and criticism over loans. This has to do with the fact that a lot of people see through these big companies and know what really is going down whenever you borrow money. Did you know, if you went to go borrow $100 and paid it off right away with that same $100, it would not cover the money that you just borrowed? That's right. You would still owe the bank money. This is because as soon as you take out the money they, start tacking on interest to the money. The more you pay back, the less you have to pay, but for a lot of us, we can not pay the loan off all at once. That was the reason why we took the loan out in the first place.

So then, over time, you start paying more and more into this loan until finally on a $5000 loan you pay almost three times that over a few years. That company just walked away with an extra $10,000 on a loan that you pulled out a long time ago. So we know how loans work, but we still use them. So where is the criticism coming from. Well the fact of the matter is, the people that do not need the loans (the rich) do not pay as much on a loan as the middle class does. The rich do not need the loan, so when they take money out for a loan (if they ever do), they can pay it off a lot faster than what we ever could. However, for the middle class it takes many years to pay it off. Over time, the middle class had to pay double what the rich did for the loan.