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Asked by Urmila Last Modified
Answer Loans not necessarily help to raise people's earning capacity. The positive impact of loan on earning will depend how the loan is utilised. For example, if a loan taken from bank is invested in a process which will fetch regular return in short or long term it will increase the earning. However, if the same loan is used to purchase a product which is only for consumption without any return on the same then it has no impact on the earning. If we purchase dress or a car or any household item with a bank loan it does not increase my earning. If I purchase land or property or invest in financial products like mutual fund there is a possibility of increase in my earnings.
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