Posts tagged: personall lending with bad credit

Personal Lending to People with Bad Credit

The whole industry of personal loans lending has become one of the most hated and controversial aspects in the world of finance and banking. Why? Because on the surface it seems to be true that the business operating in this market are taking advantage of the poorest segment of society, lending them money they may or may not be able to pay at almost unimaginable interest rates. While this assessment of the industry isn’t completely unfair, it’s not realistic to say that every person who ever uses personal money lending is down to their last dollar, just about to move onto the streets. There are plenty of examples to the contrary.

One example would be commission-based salespeople. I spent a few years in the world of all commission sales, and I can tell you there were more than a few times where I’d have one or two bad weeks and end up running very short of cash. Fortunately I had credit cards and an overdraft line of credit with my bank that got me through until I had another good run of sales, refilling my accounts with plenty of cash. But what if I’d had bad credit or no credit? Most likely, bad credit personal signature loans would have been my only option.

Another example of a completely normal person who’d need a personal loan to make it by would be a small business owner or a self-employed person. Many independent contractors operate on a 30 or 60 day billing cycle. So their business can be completely thriving, with customers coming out of the woodwork, but they still find themselves cash poor because they haven’t been paid on last month’s invoices. I know a few freelance computer programmers who have had clients take over six months to pay their bills. If that happens with more than one or two clients the contractor ends up short of cash, needing the help of a personal loan lending company.

I think we all understand that it’s in no one’s best interest to make frequent visits to personal lending companies who give loans to people with terrible credit. But we can’t just operate under the assumption that every one who ever borrows money this way is destitute – or stupid. There are perfectly legitimate reasons a person would need to borrow some fast cash for a week or two (something along the lines of a $1500 loan, and your average payday loan store is just what they need – especially if they’ve got damaged credit.