Topic: If Banks make money out of loans then they should reward those who borrow (Read 848 times)

OP, the owners of this banks are out for serious profit too, so you don't expect a bank to give interest to a borrower if I may understand, financial institution has many business then run apart from borrowing people money through loan facility, though banks are not helping matters in terms of their interest rate but their are thing you don't expect to happen just like that, I know that many people are tired of banks due to their lapses but I see it as a personal thing, if you are not comfortable with the system, the best thing to do is to do your thing without involving yourself with them that's if it is possible.

One should never take a loan from a bank unless they know that they have a stable source of income and can repay the loan on time or they know that they are going to use the money to start a business that will earn them enough money to repay the loan in full because if you stay indebted to the bank, you will not be able to clear things easily because of their systems and everything which is the reason why most people hate the traditional banking system.

It is also not easy to get a loan from a bank, they have a bunch of requirements from you when you ask for a loan, and you will barely be able to fulfil all those requirements. So in my opinion, it's much better if you can take a personal loan from a person you know who can lend you the money for no interest or a fixed interest for the specified repayment period.

A motorcycle can still be used as means of transportation or he can use it to make money like taking passengers. He can also apply as a delivery rider. It's not only what you call as luxury item but it can also be an asset to make more money.

If we have the same item and they are still functioning, it is still not wise to buy again or buy a new model. Also the item doesn't needs to be branded. We are only paying for the brand there but other non-branded stuffs can still perform the same and even better than it. Loaning to be used in a business sounds much better than the other but we should not be deceived by it, since doing a business is not easy.

I know that and this is where I think it is improper to ask for them to be rewarded just by using credit or debit of the bank. Firstly, it's important to understand that debt is not the same thing as using one's own money to buy something. It's unreasonable to expect a reward for paying off a debt, let alone to expect a reward like the debt to be waived entirely. Such a request is illogical and nonsensical.

If loan is so bad why take loan in the first place?

If the banking system is fraud like or just so wrong, why take loan?

I know people like this, they are many in this world today, they only know how to blame someone or something when they are not getting their way with it or with them.

After taking loan and wasting everything away, now the banking system is so wrong, this is a stupid accusation, if you hate loan just like I do, stay away from loans and banks.

You choose to keep your money safe using the banks, they have every right to use your money if they want, the only problem you can have with them is not getting your money when you need it, that's their job, to keep your money safe for you, if you can do it yourself, then withdraw all your fiat and take it home.

TBH, I don't read articles that much, but damn!!! I don't have time to read a wall of text like that. At least make some double spaces OP to at least make your post cleaner.

I didn't read the whole thread, and just focused on the first part, but banks will not reward those who will borrow. Oh, yes, they will reward those who are borrowing with some points called "credit points" which increases your credibility whenever you're borrowing. Well, I don't know if it's some kind of helpful because I'm not borrowing on banks, but it might be for those who are using the banks that much to get a loan.

As for OP, just forget about ranting about banks and just focus on your life. Don't think too much on things that in the end, will not happen. Have a life and focus on it. There's this thing called "FRACTIONAL RESERVE LENDING" where they can just lend your money to others until your $10,000 will become $100,000 just by lending out your initial money. Kind of funny how it works, but that's the reality.

no they dont
bank loans PRINT NEW MONEY

to explain more simply

imagine a bank has 10,000,000 customers saving an average balance of $25k each
that balance STAYS in customers accounts (total $250,000,000,000)

however banks separately get to create an allotment of ~ $225b(90%) fresh money limit it can give out to credit/mortgage applicants

they dont hand out depositors savings.. they dont hand out this fresh money total per year. either
they have to balance it out.
instead they can only send out a certain amount per year to keep the separate total balanced and equitable compared to the pegged depositors balance that allow this separate total to be made

EG for mortgage applicants that want 15 year mortgages, then out of the $225b pegged reserve, a bank can only offer $15b total per year. this allows banks to offer upto $15b a year each year without exceeding the total pegged reserve new money balance they create

by this its allows for mortgage payers to make their payments per year to refill that allotment over the years whereby at the 15th year the total back into the reserve is back to the $225b (plus more for interest and other fee's the bank get to keep)

the money used in loans is the banks own creation.. based on a pegged rate of its depositors average total holdings

banks do require bank customer deposits to then be able have the separate fresh money pot. but its not the depositors own funds that get taken out of accounts and given out as loans.. its like a secondary pot of fresh print. that goes out but must come in as repayments to cancel out the print that was created

EG
imagine your wife has $100 in her hand. and laws allow you to create a new $90 bank note to loan out as long as that someone repays $99 in X time for you to then balance your creation and allow you to then loan out again your creation.

EG
if 10 people want a loan of 10 year repayment (1 person per year) they can only get a loan max of $9 each where by the 10th year the total should return the $90 total(plus fees, interest the banks get to keep)

you are not using your wifes $100 to give as loans. but her existence of having $100 allows you to create $90 under safeguards and loan conditions that you hope the repayments rebalance the books of your $90 creation when the loan term completes, for you to then loan out your creation balance that pegs to your wifes holdings

Yes, this is none of our business, they make a profit from lending money that people save to the bank, that's how the bank system works and if we don't have trust in the bank then it would be better for us not to save the money we have and I really agree with We would be better off investing the money we have and not saving it in the bank if it is not profitable for us.

As savers, of course we have to be aware of the rules given by the bank and if we don't like these rules, it would be better for us not to save the money we have at the bank.

I don't know what country you are from or how your financial system is set to operate, but the thing here in my country is that having a stable balance for a certain period of time can generate rewards.
 
The rewards might be less than what they earn from your money by using it to do business, but we have to understand one thing: they need to make money in order to set up a system that will keep those funds you left in their hands. They also need to pay tax, rent, and salary. All this is coming from the profit gotten from a loan given to customers.
 
If you want to save in crypto, you are free to do so, but just take security very seriously. If any staking platform that promises you a high ROI runs away with your money, you can get them anywhere, and that will be the end of it. Learn the kind of ROI you chase. Any one promising a huge return is likely to be a scam, and you can lose your money trying to chase money.

yeah its silly, even trying to get loan from bank is kinda complicated already if someone is not really willing and consenting then they definitely aren't gonna be getting any loan.
if someone falls into debt, its certainly because their own fault, if there's any slight risk that they can't pay off debt in the future they should know better about the risk management.
bank exist to lend money, with accompanied risk of course, so that it can get some interests back to their hand to grow the money.
people in the other hand, should know better that these money aren't free money, its a money that need to be paid back and most likely double of the amount if the credit term is long.

I don't know the country where you reside because in some countries despite the banks making money through loans the people who also request for the loans get a reward from the loan the requested for although it's not from the banks.
Most of these loans are tax-free by the Fed and the idea was introduced as a way to make them print more money.

This is quite possible for some people because I myself have also come across people like that who are actually willing to get into debt just because they want to show off their new items to other people around them. And I think that's really bad and not good at all because the benefits are non-existent and it can create debt for ourselves, which in general is not very good.

This is only useful for people who know how to manage and optimize offers from the bank, but who don't know how to manage and optimize what the bank has to offer. Of course it will not be easy for someone to make a more advanced development through themselves so that someone will only be chased by the bank when they cannot pay off the credit that has been given by the bank.

Do you still know what you are saying?
If your friend and other people are full of debt that is because they are not responsible and probably want to show off to other people their new stuff and didn't think about their financial stability.

Banks provide numerous benefits, especially through their credit card offerings. If you are knowledgeable about how to manage and optimize your credit card usage, you can take full advantage of the generous rewards they offer. These rewards are an incentive for customers, and you may be missing out if you are not keeping up with their latest news and updates.

This one really shows that op doesnt really know that basic concept on how banks do works and even in other business as well. We do know that Banks are businesses too on which if they do make money out of
peoples money then so be it and its none of our business on how they do make those things on which the important thing on here is that you do already know on what to do. If you do hate banks
then better not to save your fiat into those institutions but rather you would really be focusing on trying out to make investments or businesses on which you wont really be able to store up your funds
into these places.

As a savings or depositor, then why the heck you would really be asking for more rewards? just because they do make huge money out of your funds?
You dont have the rights to say that.

You fail to grasp some really basic financial concepts, yet continue to make broad statements like you have a clue about the topic. It's like saying "Apple makes money from iPhones so should make their phones cheaper" or the same analogy with coca cola. The basic logic is missing entirely. Banks make most of their money, profit, the thing they are encouraged to make by theirs owners - the shareholders - and not random strangers like you who don't understand how basic economics work. Besides that, bank shares will make up a fair proportion of retirement pensions, so it would also effect every single person who saves that way if they did.

This is exactly what I am saying, taking loan must be last option. My father used to tell me story about his bank loan which he took for buying a motorcycle, he find it hard to return it and advised me to stay away from bank loan. So I am from very beginning an anti bank loan type person.
Taking loan to meet your luxury expenses like buying iphone is foolish act and must be avoided on all cost. But there are cases where people took loan for starting a new business and returned after successfully launching the business. Try bank loan if you can manage it otherwise stay away from it.

If loan can be avoided then we must really do it so that there's no large part can be taken to us and we will not face the hard consequences of bad decisions we do for taking those loan.

Its important for us to know how to manage our finances also avoid those luxurious things and other important matter that doesn't contribute anything to us so that we can live free from having a bad credits came from those bank institution.

But if we can't avoid to take those option much really better if we use the borrowed amount in good way like increasing the size of our investment on the business we create then from there for sure everything will be fine on our end with doing this decisions.

I am personally very much against taking loan from banks because they take too much in return. But this is also a reality that banking system exits for centuries and people are taking loans from banks ever since they start giving it. There must be some benefit in bank loans that's why its in business for so many years? Like people are taking loans to start a business and if you utilise that loan with correctly in running a business then one can easily return that in due time. Taking loan from bank is better then asking money from people.

Yes, that's right, totally agree with your opinion. Banks are smart businesses for themselves, but not good for their customers. Banks don't actually keep customers' money, on average customers' money is diverted for credit and savings elsewhere. If there is a large withdrawal, they often don't have the money and even have to wait for days. Not to mention that there are administrative deductions every month, the bank is indeed unfair to customers. In fact, if we want to examine more deeply what actually happened, it tends to lean a little towards conspiracy. There are many irregularities related to the world financial system. So now don't be surprised why Bitcoin was created, because the banking financial system is not very profitable for customers.

Interest, fees, and the tiny print that keeps people dependent drive banking profitability. You accurately depict the constant pursuit of materialism fueled by debt, yet the switch to crypto is a measured step toward sovereignty.

Cryptocurrencies are a financial sovereignty paradigm shift, not merely a way out of banking. The decentralization of blockchain empowers individuals, not institutions. DeFi is still young and not a cure for all borrowing requirements, but its rapid growth and innovation indicate a future where financial intermediaries are optional.

Reluctance to accept crypto as a loan alternative underestimates blockchain solutions' adaptability and innovation. It's about redefining financial independence, not just replacing systems. Our willingness to shift and learn about crypto solutions is the difficulty, not the availability of crypto solutions. Our ability to negotiate the decentralized future of money will improve as we identify it.