Controlling Your Personal Debt

Banks have so such part in helping people in controlling their debt or credit and this is one of the best things about banks. A line of credit is being accorded to a bank customer. A bank uses such favor as a policy of attraction to big depositors. It must, therefore, be a special concession given to a select few, for it does offer several conveniences for a busy businessman. Besides, this policy of getting small amounts at different times would eventually entail larger expense account hence reduction of profits. So, the businessmen may consolidate his needs into one big amount. As gauged through experience in his particular business and apply for a line of credit which will run for a specified period of time.

To safeguard its own position and of the borrowers, the bank will impose regulations to be met I approving lines of credit. One such regulation is that he use of collaterals. So that if the business ma fails to pay, then the bank could at least recover from the security given. Another is to make the businessmen clear their accounts periodically to show proof of his capacity to pay. The bank may also require marginal deposits to establish the liquidity of the borrower to a certain extent. The bank is not legally obligated to honor the borrowers’ need when circumstances do not permit advancing of funds. Neither is the businessman required to borrow if he does not have the need of the funds. The banks have however the moral responsibility in filling the businessmen’s’ needs at the time by virtue or acceptance to service the borrowers needs. The accommodation will be base and made to the availability of the bank’s funds. As an individual, we should be more practical now and help ourselves to be thrifty and money saver.

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