How do you make money from lending

Money is not lent by lenders merely for the sake of lending. They do it in order to profit. You must be aware of that. The distinction between brokers and lenders is that the former make money by acting as a middleman between the lender and the borrower, whereas the latter use their funds.

Lenders may borrow money from larger banks or utilize the depositors’ money to fund loans. Savings, money market, and other depositor accounts are paid low interest rates by lending institutions. There is also a licensed best money lender in ang mo kio that offers unsecured loans for both personal and business use.

These will be used to raise funds that will be loaned to borrowers. As with credit cards and loans, the interest rate will be higher this time. Lenders appear to be the evil guys since that is how they normally generate money. But you should be aware that lenders serve a crucial function in the economy. One thing to keep in mind about lenders is that their main goal is to increase their earnings. Given this, you should be aware that borrowing money from a lender carries a warning.

Borrowing money will cost you money:

It is imperative that you fully comprehend the details of your agreements if you use credit cards. The only thing that protects you from the exorbitant expenses of borrowing money is your credit card agreement. Following are some fundamentals of borrowing money:

Interest, costs, and finance charges

How Lenders Can Profit from Your Mortgage

Mortgage lenders can generate income in a variety of ways. Among them are:

  • Origination charge: a cost equal to 0.5% to 1% of the loan amount that must be paid in addition to the mortgage payments. It raises both the overall interest rate and the house’s overall cost.
  • Discount points — during closing, discount points assist in lowering the mortgage’s interest rate. One discount point typically equates to 1% of the mortgage’s total cost.
  • Loan Servicing: Lenders who service loans obtained through mortgages might profit by doing so; in exchange, they receive a recurring fee or a tiny portion of the loan.
  • Loan Closing Fees – Be prepared to pay fees when a mortgage transaction closes. Closing costs are assessed differently by each lender.


These are just a few of the numerous ways that lenders might make money by granting you a loan. Interest is the most visible source of income from lending. However, if you are aware of the procedure and pay close attention, you will discover little but important fees that raise the cost of borrowing.