do banks loan money or do they create money from your signature?
July 13, 2011 by sigmi
Filed under Signature loans
do banks loan money or do they create money from your signature?
July 13, 2011 by sigmi
Filed under Signature loans
do banks loan money or do they create money from your signature?
Loan. They get it from other people or companies who put money in to that bank, or from other banks, or from their investors who own their shares and bonds.
Loans are the bank’s profit makers. That’s where they make money besides financial consultancy and investment management services.
First banks can not make money that responsibility lies solely with the US Treasury Department. The banks get their supply of money from the treasury, and loan it to you an individual or company based on your credit score and collateral. Second the only thing your signature can do is bind you to the contract you sign with the bank, and that’s it.
This is how the bank runs.
Me and u decide that we want to start a business( a bank)
Both of us put in 10,000.00 each. Clients start to bank with us, opeing accounts.
The money we receive when the client open account that is the money we will loan to clients who want a loan. If the person borrow 100,000. He / she will have to pay back approximately 135,000. so right their the bank will get back your money that was loan to the person and will also make a profit for itself.
You understand.