One of the things that have brought consumers and groups to their demise is the fact that they tend to approve loans and borrowings half-baked. It is a fact that people have this mentality of borrowing more than they can afford to pay. A lot has to do with satisfying their various rants that include buying a new car, a house or even for starting a business. While they are excited at first, it is really how you manage to pay the amortization that needs addressing.
But in the first place, how can their loans be approved? We know for a fact that banks and lending institutions will fall if they don’t get loans from people. So why approve loans if people are obviously not able to settle them based on the agreements that they get in?
Interest rates are a given. Bu tone thing that people fail to realize is that penalties and interest applied on the principal amount will be their downfall. Interest rates have been cut but it is unlikely that this will solve the problem. In short, proper derivation of up to how much a person can really cope up with should be strictly emphasized.
Also, crack down on forged documents. It is apparent that employment certificates and bank statements can be easily fabricated. Even if you verify, they can be easily covered since prior arrangements with them have surely been done by the person applying for a loan. Maybe if they find something else to base the financial capacity to pay then we would not be in this mess of finance institutions trying to cope up with bad debts stacked up.