Loans for consumer durables: International Marketing - Essay Example

 Loans for consumer durables Introduction Money lending to citizens for payback after some time with interest charges is termed as loans. Financial institutions that give loans target to gain interest at the end of the grace period. Interest rates vary depending on repayment time and uses of the loans. Some of the various uses include mortgage loans, personal loans, and automobile loans. This helps citizens deal with most financial needs and even come up with investments that give them returns to pay off the loans. This article will discuss on the disadvantages of loaning activities by financial institutions, their relevance to the life of citizens, and their in the society. This essay will criticize lending to the low-income citizens since it exhausts their low incomes by the high rates and hence does not give them the opportunity to invest individually. Most of the financial institutions offering loaning services exploit their customers in attempts to maximize on their profits. Individuals who get loans should prove their ability to pay back the lent amounts in time and with the expected rates (Swan and Zou, 2012). Consumer needs can classify as primary needs, secondary needs, or tertiary needs depending on the demand for their satisfaction. Tertiary needs only makes life more appealing and involves the possession of commodities such as classic watches, classy cloths, having luxurious cars and living in utter homes. Hence, there is the need to satisfy primary needs before getting to the luxurious commodities. Primary needs involve the demand for food, shelter, and clothing. Financial institutions that give loans to consumers for purchase of commodities such as personal computers, ice cream, and other tertiary commodities are not justified. This is because loaning involves paying back with extremely high rates and hence exhausts individuals of their incomes (Mühlbacher and Leihs 2006). Loans should only be encouraged in times of emergencies or during the purchase of quite necessary commodities like housing, and food. Other commodities to buy using loans may be educational materials that equip one with the knowledge to get in the job market and conquer most of the challenges in the society including the high levels of illiteracy standards, which discourage growth to most of the societies. Some of the persons who go after loan services are after living quite luxurious lives than they can actually afford. Therefore, the necessity for a set of laws on the use of money and there needs to be security for all money on loan. Lenders take the risk of giving out finances without assertion of getting back their monies. Such risks are taken care by the high profit returns that they enjoy after lending out finances. Investments set up with lent money do not enjoy appropriate profits since they use most of their profits for payback. This makes it had for most businesses to manage appropriately their funds between paying off loans and catering for all expenses in the business. Such businesses end up with the proprietor gaining remarkably little for him, or herself and with increasing challenges and some businesses do not survive the market pressures (Mühlbacher and Leihs 2006). Business proprietors come up with investments with the aim to enhance their living standards through the incomes earned and to gain experiences in the job market. They end up sharing their little profits among many needs, and this leaves them with exceeding insignificant disposable income. Low-income workers survive on extremely meager salaries in paying of their debts of high cost loans. This has resulted to lowering the standards of living and hence need the government to protect its citizens (Swan and Zou, 2012). This has enhanced formation of specialized trade co-corporations that cater for financial needs of workers who lie in the same category. They include public workers associations and the federal trade co-operations that give loans to customers depending on their income levels and at high interests. Loans to repay after earning salaries usually given at quite high rates and hence some individuals may be unable to pay; giving counterfeit credit status to most of their lenders and this denies them the opportunity to get more credit services. When getting loans to spend on purchase of commodities such as cell phones and other consumer durables, the lenders limit the amount that is on loan. In emergency cases, an individual has to get alternatives since the amounts given cannot be helpful (Mühlbacher and Leihs 2006). One has to avail themselves to the financial institutions to give explanations on why the financial institutions should offer loans at the maximum amounts and on the pay back plan. However, the government to draw more individuals for crediting, does not tax some of the loans offered, but contrary the set standards of accessing such services are too high and remarkably few people are able to meet. Most individuals with financial problems opt for the government backed debt consolidation loans that to have their limits. The distributions of such loans, characterized with bureaucracy, get paid off immediately (Swan and Zou, 2012). At some incidences, the individuals in charge may be unwilling to give off the loans. The application procedure also involves a lot of paper work with strict requirements hence may not always serve as per the needs of the borrower. This may force individuals to seek for alternative ways of getting credit finances. Individuals in need of the financial services should be patient enough to fill all the papers, and wait for the clearance until cash release. Lack of proper advice on the variety lending services and lenders in the market makes consumers make the wrong choices on where receive the best services. The varying interest rates in the market need to communicate their changes. This helps citizens choose on the most suitable offers from the lending institutions that do not constrain them of acquiring primary necessities (Mühlbacher and Leihs 2006). Some of the institutions do not follow the set rates that the government recommends and hence the financial institutions gain enormous profits at the expense of exploited citizens. Improper financial management in the institution contributes to losses that they try to cater for by overcharging the interest rates of the loans given. To conclude, loans help finance crucial needs and emergencies. They offer capital for investment projects and other personal needs and refund back with profits. Financial institutions that offer loaning services some end up exploiting the natives through the high rates and hence need to regulate on their lending services. The government should also protect its citizens from such exploitations by setting regulations on lending rates and the uses of lent monies. Some low-income individuals lack proper management of loans and this many times results to loss of personal benefits due to debts. Financial institutions should hence come up with lending rates in favor of low. References Brady, D. L. (2011). Essentials of international marketing. Armonk, N.Y: M.E. Sharpe. Mühlbacher, H., Dahringer, L., & Leihs, H. (2006). International marketing: A global perspective. London: Thomson Learning. Swan, K. S., & Zou, S. (2012). Interdisciplinary approaches to product design, innovation, & branding in international marketing. Bingley, U.K: Emerald. Read More