Theideaof a bank that loans out money to the public, totally metamorphosed the premise of ancient banks that stated that a bank was only a place to deposit money for safeguarding. Present day banks are synonymous with bank loans to such an extent that today practically every individual who has a bank account has a bank loan of some sort or the other.
It is improbable that in the present day and age anyone (unless born to money) has enough money lying around to make big ticket purchases like a flat or an apartment, without resorting to a bank loan.
Bank loans have attained the reputation of a necessity in todays scenario where temptations to own products are so great that one takes the recourse of a bank loan and in return enjoys the product or benefit from the appreciation of an asset purchased while paying backing installments. Be it an auto loan, a bank loan for a specific purpose or a home loan, present day banking system provides loans for practically anything and everything that one may want to own. Without these convenient bank loans lots of people would never been able to purchase that new car or a laptop or a home.
When I was a boy, there was but one permanent ambition among my comrades in our village on the west bank of the Mississippi River. That was, to be a steamboatman. We had transient ambitions of other sorts, but they were only transient. When a circus came and went, it left us all burning to become clowns; the first negro minstrel show that came to our section left us all suffering to try that kind of life; now and then we had a hope that if we lived and were good, God would permit us to be pirates. These ambitions faded out, each in its turn; but the ambition to be a steamboatman always remained.
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)
Factually, a bank home loan is similar to a mortgage with a collateral attached. The only matter of concern that remains is that one gets tied up for a long period and has to keep on paying interest on the loan.
With the passage of time, bank loans have become so versatile that there are bank loans for buying white goods, consumer goods like computers and even for repairs, renovations, marriages and celebrations. It is a case of you name it and that bank has it. There exist student loans too, where a bank advances money for studies with a condition of repayment after the student joins the mainstream and starts earning.
Broadly speaking, even credit cards are a form of a bank loan that you can repay and some banks even offer you loans to pay up other loans you may have taken in the past.
We do not go to bed in single pairs; even if we choose not to refer to them, we still drag there with us the cultural impedimenta of our social class, our parents’ lives, our bank balances, our sexual and emotional expectations, our whole biographies—all the bits and pieces of our unique existences.
—Angela Carter (1940–1992)
Bank loans issued to individuals for the purpose of housing probably out number other loans issued by banks. But they may not compare in volume or value to bank loans issued to businesses worldwide. Whether it is a small business operated out of the home or a large business that needs millions of dollars in order to tide over a cash flow problem or to acquire assets, bank loans issued to businesses far outstrip individual loans. In fact it will not be an exaggeration if one were to say that without bank loans the vast majority of business worldwide would collapse. Business in modern day thrives on the banking system and the investment, lending, finance and credit that it facilitates.
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