Question

What does a bank use to make loans?

Answer 1

Banks usually use the deposits of their customers and use it as a loan to another, like for example. Say that I deposited $800 to the bank and u walk in and say u need a loan of $800 to help u buy a Honda, first before the bank gives u the money, they will check your credit score to see if u are reliable and trust worthy to get the loan and give it back to the bank, so they check your score, if its good they will loan u the money, but in some banks, they give it to u, but some people don't realize that banks are making more money cause while they loan, they can charge u fees like say monthly, just by giving u the money to loan, so that's why its better to buy a car in cash forward rather than ask a loan, cause banks are going to give it to u, but when u give it back to them they will charge u a fee just by getting a loan from them. If u don't repay them or loan them back, they can take the money by FORCE : that means they can just take it out of your card and can use the authorities as a shield and tell them why so they can have that as a reason, so that's why its called ''repossession'' of where the bank takes your things if u don't loan them back.