Lending systems were available as old as 3000 years before. One of the earlier forms of lending systems were pawnbroking, a system of collecting collateral to offer money in return.
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The purpose of the loan must be well defined and it is advised by the financial experts to think all the means before succumbing to get the loan from the banks. EMI is a good method to pay back the loan, at times the payback amount through EMIs can easily touch two times the amount availed as loan. It all depends on lower term duration, lower the term, lower the amount paid back as interest.
References
- https://www.ifmrlead.org/wp-content/uploads/2015/OWC/Incidence%20of%20Loan%20Default%20in%20Group%20Lending%20Programme.pdf
- https://www.sciencedirect.com/science/article/pii/S0305750X97001216