BORROWER PREFERENCES

ABSTRACT
In this article, I am going to illustrate the latest borrowing preferences in our current world. The way in which financial institutions lend and handle transaction has been changing over a period of a time.  Same can be attributed to the borrowers they have changed in how they used to borrow money and also the reason which were behind them to seek for loans. The borrowers lending patterns have changed over a period of time making lending institutions very technical when giving loans. Also, the loan repayment amount has changed over a period of time depending on borrowers preferences.
The reasons why people used to borrow loans and also the security offered to lenders as a method of recouping the amount loaned in case the borrowers default payment has changed. In the recent years lending organization use more technology to check the creditworthiness of the client than before. They are much software which analyses previous transactions of the client with an aim of evaluating how much money can be lent to the client with a minimal risk of default payment. Also, there are many databases where client’s creditworthiness can be determined based on his or her past borrowing experiences, if they paid they previous loans fully and in stipulated time the creditworthiness score increases making it easier for them to access loans in future. Also, those who had delayed previous loan payment or failed to fully pay their loans have their creditworthiness decrease.
INTRODUCTION
In the introduction part, I am going to revisit our research question which is how do modern borrowers prefer to go through the loan process? There is a very good question different borrowers have different borrower preferences. There are those borrowers who prefer going for loans to invest which can recoup the amount borrowed plus the interest accumulated. Other borrowers prefer using their employment as security and take loans to build their houses or also take a mortgage loan. People work in a different way which can be attributed to different borrower preferences. Another aspect which I can mention here is how do the borrower pay the loan back will influence how much they take in terms of borrowing.

We have even seen governments taking loans from private banks or other nations with an aim of using the loans to build infrastructure which can pay back the loans. The loans given to government are what we term as government bonds which citizens of the nation can also invest in them and make money when the government starts paying. As we can see borrowing can be used to improve livelihood it is not only for the persons or organizations which are having cash flow issues it can be applied to improve quality of life such as borrowing for investment purposes. And there is variation in borrower preferences since all human beings are unique in their own right.
FACTORS INFLUENCING BORROWER PREFERENCES.
There are many aspects which comes to one’s mind before making the final decision about borrowing some money for a given reason. Th reasons can be for personal gains, financial gains or social gain. Whatever the reasons are very calculative and avoid ventures which cannot add monetary value because the amount borrowed will be increasingly taking interest and inflations into account. Some of the factors which influence borrower preferences are as follows:-
Amount of money earn. The borrower will look closely at the amount of money they are earning on a daily, weekly or monthly basis. And they should ask themselves an important question will my earnings be able to accommodate and pay the amounts regularly without failing to avoid fines, impound of security and also without straining his or her day to day activities. The borrower should be able to understand if their earnings cannot finance the loan repayments there will be consequences. Do not take loans of any type with a paycheck which will make you homeless or sleep hungry when the deductions are incurred on it.
Reason for borrowing. The borrower should clearly state why they are borrowing the money if it is a business investment they need to have a business plan ready. So that once the funds are processed they can begin hitting the flour busy trying to make that idea a reality. The business plan should also include financial projections and the profit to be made should be able to support the repayment phase of the loan without breaking a sweat.
The business idea should be self-reliance. If the loan is a car loan, you need to be very sure that the vehicle will help you in your work so that the money can be deducted from your paycheck without giving you problems. However financial advisors advise people against financing their cars using loans and taking into account cars are not a necessity if you are starting your job. It is another liabilities since repairs and fuel bills will start knocking your financial door plus the loan repayments. If the reason for acquiring the loan is for a mortgage that is great because the price of the house and the land build on it will keep accumulating and increasing. 
Another factor affecting borrower preferences is the terms for the loan repayments. The style which the financial institutions want they money to be paid back can influence the person to take the loans or can cause them to stay away. If the borrower is given good terms with the lender that will act as a catalyst of accepting the loan terms and hence taking the loans. Also if the terms are not attractive the borrowers will stay away from the lender's financial institutions.  Attractive loan terms with hidden clauses by the financial institutions has been used sometimes to lure unsuspecting borrowers only for them to discover they were dubbed and in that process losing everything. So if you are interested in taking a loan for any purpose make sure you review the terms document very well.

CRITERIA USED BY FINANCIAL INSTITUTIONS IN AWARDING LOANS.
Financial institutions have a really had a process of determining who is worth giving a loan and who is not giving a loan. I came up with some criteria used by financial institutions to analyze their customers here they are:-
Finacial institutions check your income. They check your monthly and yearly income and analyze the figures depending on the amount of money you want to borrow. They prefer the payment rate to be 43% or less of the total salary per month, which is 43% of your pay is deducted you will remain with 57% which can sustain you provided the loan money was invested or used well.
Financial institutions also check your employment history. They check these part to make sure you have a stable employment history to be able to support the loan repayment. In the instance that you are a business individual, they will check your earning reports and other financial reports available. They will also analyze your transactions history with them to be able to satisfy that you can repay the loan promptly.
They will also go through your loan repayment history before giving you loans. If you have taken any loan from them or other financial institutions they will go through your repayment history. The main aim of this point is to check if the borrower usually pays their loans within the stipulated time. And also they pay the correct amount or in some instances, they paid in lump sums after the right period of time with the correct amount of interests. These step only works for those who have a history of taking loans, there are first-time loan borrowers who start on a clean slate and don't need to go through this barrier.
The financial institutions also check your equated monthly installments payment amount. These will allow the lender to check if they can be able to sustain the loan repayment amount. Also, the lender will satisfy if the borrower is able to pay the amount or not based on his or her monthly payment. It is a very important step and one of the main borrower preferences where borrowers can not borrow an amount of money which they can not be able to pay. Also, financial institutions need no more determinant that these if the borrower monthly income can suggest that they are in a position of paying back the amount. But on the other side if their monthly income is washed and can not support the loan repayment the borrower will understand if he or she is denied the loan amount they wanted citing these reason.
The financial institutions also need to see the collateral offered. A collateral is an asset given by the borrower to the lender in case they fail to pay the loan the lender sells the asset to get their money back. The financial institution needs to see the financial amount which the collateral is and also see if it will have appreciated the price of the years the loan is active or depreciated in value. If the collateral fetches more money than the loan plus the interests after the stipulated time then the financial institution should take the deal. Since a financial institution is doing business just like any other business they are in operation to make profits. 
DISCUSSION
Borrower preferences should be taken into consideration at all times by financial institutions which are interested in prospering and making more money in terms of lending and earning interests. Our modern world has changed and the borrower preferences have not been left behind. Many borrowers prefer taking mobile phone money loans in case they are having a small emergency where the amount borrowed is sent directly to the borrower's phone. Also, there are instances where the borrower will just want to fill loan application forms from their computers at home and send them. The financial institutions do not have a choice but to move with the current trend and invest in a state of the art technology devices. They should also employ qualified people to take care of it.
Borrower preferences have been constantly changing some of the new trends are online banking and cryptocurrencies. Cryptos has shaken the banking industries in the near past and the ripples are still spreading. Many borrowers use these platforms it is up to the financial institutions to also involve themselves in them because there is a huge chunk of the available market. These borrowers prefer the amount borrowed to be deposited into their online banking or cryptocurrencies wallet. The blockchain technology is leading a revolution in how we used to do our banking. Lenders can use its open ledger system to identify potential good borrowers because blockchain uses an open ledger making all transaction happening there to be visible to the whole world.
CONCLUSION
In conclusion, I will urge lending institutions to monitor the ever-shifting borrower preferences and try to fulfill their needs. The shifting in borrower preferences is a problem which financial institutions need to solve the problem to be able to be in business. Since entrepreneurship is always about finding a problem in a society and solving it then the money starts flowing in. So financial institutions should solve the ever-changing borrower preferences to be able to be the best in the business. Emerging of current technology in the banking industry has however changed the business preferences even more.
Financial institutions are this operation to make money just like any other person or organization who undertakes the business operation. So if the borrower intends to take a business loan he or she should start by first investing their savings in the business. This aspect of investing in the business means the borrower is confident of his or her business plan. These assure the financial institutions that the borrower is there to recoup is money and in that process, he/she will be able to pay back the amount loaned plus the interests without problems.
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