Give an example of a loan which worked out well and a loan w

Give an example of a loan which worked out well and a loan which didn\'t. The loans could be based on your personal experience or the experience of someone you know. Why did one loan work out and the other one not work out? What was it about the down payment, interest, period or other terms that made a difference in the outcome?

Solution

Not exactly an answer to your question but i am rather taking a random example but i am sure this will make everything you are looking for quiet clear.

If you want to buy a house, you can either take a loan or use your own funds. Now, which option would be more beneficial and to what extent would depend on four variables.

These are the amount of loan, interest rate payable on such a loan, the tenure of the loan and the interest that your own funds can generate.

Each of these figures is critical and will affect the analysis significantly. For example, the total amount of loan and the prevailing interest rate will obviously determine the estimated monthly instalment (EMI) and the tenure. Any change in the EMI will affect the tenure and any change in interest rates will affect the EMI.

The return that your own funds can earn would, in turn, determine whether you should opt for a loan in the first place and if so, how much. So basically, it is the interplay between these four variables that eventually leads us to the most optimal solution.

For example, let