How banks benefit from lending money

[Fire&Rain]

Banks don’t just lend money out of kindness, it’s part of their business model. When they give out loans, they earn interest, which is basically the price you pay for borrowing. That interest is one of their main sources of profit. On top of that, lending helps them build relationships with customers, which can lead to more services being used.

 

[Suba]

In fact, the way banks make money from lending money is from the difference in interest (spread), where the interest charged to loan takers will be higher than that of savers and depositors, besides that, banks will usually also charge fees on loans such as administration fees, even if they are small amounts.

 

[Kross]

Their profits is the interest they get from lending that money. When banks give loans, they are doing business.

 

[Springtime]

Banks charge interests when lending money which is a main source of their income.

 

[Augusta]

Banks benefit by paying depositors a low interest rate and being able to charge borrowers a higher interest rate.

 

[Fidelia]

Banks benefit by paying depositors a low interest rate and being able to charge borrowers a higher interest rate.

That's it. They would pay depositors like 3% interest rate per annum. And charge borrowers about 8% monthly interest. That's massive profits.

 

[Starmix]

That is the purpose of banking to help the people in urgent need of money, after which, the loan earns interest for the bank to call profit