Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.

Q.10:- Manav needs a loan to set up a small business. On what basis will Manav decide whether to borrow from the bank or the moneylender? Discuss.

 

Answer:-

Manav will decide whether to borrow from a bank or moneylender on the following terms of the loan.

(a) The documentaion and collateral required (he should be able to make these available).
(b) The rate of interest charged.
(c) The mode of repayment (periodicity, cash/kind, etc)
(d) The penalty in case of default in repayment.