I would guess a loan is extended mostly so the one taking it can save face. Some people would choose to live on the streets rather than take a handout and a loa

I would guess a loan is extended mostly so the one taking it can save face. Some people would choose to live on the streets rather than take a handout and a loan makes it palatable. There’s a (possibly apocryphal) story about George Clooney offering 15 friends $1,000,000 but only if they all take it, so that the friends who would say no out of pride could justify it.