Interest rate isn’t by how much one would be interested in a loan, the rate of one’s interest in a loan that is. Well, it kind of is; it is how much one would pay for a loan, or better yet, how much one would be interested to pay for a loan. One might argue; if the loan is interested, I better be interested as well. Well, that depends on whether there is interest or not. Should there be interest?
Interest rate is a price; It is a price for borrowed money. It is therefore a price for money which from the get go makes no sense. It is based on the premise that a certain amount of money after a certain amount of time is not worthy of itself, but worth more. Praise the dollar bill everyone!
The idea of paying back a certain amount of money with more money makes as much sense as paying with a camel for a cow; they both give out milk, their meat is arguably equally delicious, yet you, or actually the person who lent you the cow, can ride the camel through the desert and it would survive without drinking water for months. What for? Exactly. Get a cow instead. Now, you can try to ride a cow as well, but if you had that thought, either you are about to fantasize about tipping one, or you are preparing an argument for the exchange.
Consider money as a product, which is what interesting loans entails; increasing the price lowers the purchase power and hence lowers the value of money. Hence, by taking an interested loan, you are less capable of taking a loan, and your loan that you have just gotten is as well less capable in terms of purchase, and hence you are. This is ironic; since the goal of taking the loan in the first place is to become more able in terms of purchase.
The same applies to banks; by selling money for a profit and increasing the price of this product, they lower people’s capability of taking loans and hence have less business.
We must realize that we are talking about a business, banks in this case, whose main activity, giving out loans with interest rate in this case, provide less business, less loans with interest rate that is. It is a decelerating type of business.
In conclusion, either one is interested or the loan is.