High risk loan lenders love secured loans because their risk is minimized by the presence of collateral. That’s why so many car dealerships can announce that no one will be turned away from buying a car because of bad credit. The lenders who love to take chances are pumped up over the chance to lend a troubled borrower money for a car, usually at three or four percentage points above the low risk buyer because they know where the buyer lives and a flat bed truck is waiting to take the car back at the first sign of serious loan default. Now in reality, the lenders who love high stake chances don’t want to take the car back because it’s a losing proposition for them, but still the chance isn’t as bad as the signature loan type of lending agreement. But the numbers are in favor of these high risk loan lenders because if they don’t make money, they are quickly out of business!
So what is the profile of the person who would use one of the many strip mall lending companies across the country that have national names that are easily recognizable? For the younger demographic, the borrower might be a college student, getting an education without the help of parents. The lending agreement could be for lodging or food or anything related. Perhaps a young couple just recently married wants to buy some furniture for an apartment and one of them has a bad credit history. A husband may have his heart set on a bass boat or a wife wants a new wedding ring or perhaps it is for braces for a child or a powered wheelchair for an aging parent. An unsecured signature lending agreement provided by high risk loan lenders can be for anything, and many companies don’t require the reason for the lending agreement. Simply a signature on the contract promising to repay on time is required. But it is also the reason for very high interest rates, sometimes being as much as thirty percent!
The purpose of advertising, whether the media is in America or around the world, is to get people to be unsatisfied with their present state. Unsatisfied with the two year old car, unhappy with the present dish washing liquid, sad about the house one presently lives in. Once that dissatisfaction is created, it’s just a waiting game until the unhappy consumer breaks down and does the inevitable. When anyone becomes so unsatisfied with the present condition and the solution seems to be buying something new, the high risk loan lenders are grinning with delight because somewhere along the way they will get to say yes to a loan for something not really needed but very much desired. “Not that I speak in respect of want; for I have learned in whatsoever state I am, therewith to be content.” (Philippians 4:11)
So think of all the things purchased in life because of dissatisfaction, and think of all the things that really aren’t in the budget but they are purchased anyway. Often too many commitments for too many things not really needed bring financial ruin to families across the country. Commitments brought on by the curse of dissatisfaction or greed or pride. So while local banks have the good sense in most cases to say no to overcommitted borrowers, high risk loan lenders are willing to take the big risk and basically give lending agreements to stupefied borrowers too numb to know the pain being self-inflicted. And the beat goes on. In the meantime homes are lost, marriages break up and the advertisers win another round because keeping up with the Joneses is too high maintenance.
High risk loan lenders may be some of the friendliest people on the planet and they may provide a good service for a very small percentage of the population. For example, if a person or family has had horrible credit in the past and have basically become outcasts of the credit world, a fresh start might mean having to get a small loan with one of the many high risk loan lenders online or down the street. Paying back a small loan on time each month can go a long ways towards repairing a highly flawed borrowing history. But generally speaking, loan companies offering to give more buckets of water to already drowning customers may be lawful, but possibly not moral. Perhaps the time is right for the reader of this article to honestly do a thoughtful, honest and thorough examination of life’s priorities. After all, someone once said that one never sees a hearse pulling a U-Haul trailer.