레이블이 Consumer Debt Service인 게시물을 표시합니다. 모든 게시물 표시
레이블이 Consumer Debt Service인 게시물을 표시합니다. 모든 게시물 표시

2013년 11월 24일 일요일

About 'debt service to income ratio'|Debt to GDP ratios are irrelevant (or : why Japan is not in such a difficult fiscal position)







About 'debt service to income ratio'|Debt to GDP ratios are irrelevant (or : why Japan is not in such a difficult fiscal position)








Peer-to-peer               lending               is               a               way               for               lenders               and               borrowers               to               meet               without               having               banks               involved.

The               details               in               this               article               are               based               on               personal               experience               with               Prosper,               and               the               individual               details               of               the               process               may               vary               for               other               sites.

There               are               other               microfinance               options               but               I               have               not               yet               tried               them.

The               website               addresses               for               all               known               options               will               be               at               the               bottom               of               this               article.

A               simplified               version               of               the               prospective               borrower's               credit               history               is               displayed,               which               shows               if               any               delinquencies               have               occurred               in               the               last               seven               years,               or               if               public               records               have               occurred,               as               well               as               the               beginning               year               of               their               credit               and               how               many               lines               of               credit.

It               rates               the               borrower               with               ScoreX,               which               goes               from               AA,               A,               B,               C,               D,               E,               and               HR               (high               risk),               and               shows               debt-to-income               ratio.
               Borrowers               propose               a               rate,               which               abides               by               their               state               laws,               and               is               in               keeping               with               their               credit               history.

They               write               a               description               of               what               they               need               it               for,               and,               hopefully,               give               a               budget               of               their               expenses               and               show               how               they               can               afford               another               obligation.

They               may               explain               any               delinquencies               that               occurred               in               their               credit               and               how               they               have               learned               from               that.

If               they               belong               to               a               borrower               group,               especially               one               that               vets               (verifies)               income,               it               is               easier               for               lenders               to               take               the               risk.
               Lenders               (called               loan               purchasers,               because               they               put               up               the               money,               but               the               peer-to-peer               lending               website               makes               the               loans)               scour               the               listings               for               borrowers               that               merit               their               trust,               based               on               their               own               personal               criteria.

When               they               bid,               they               can               bid               choose               the               amount               they               want               to               bid,               with               a               minimum               bid               of               $50,               and               they               can               choose               the               lowest               interest               rate               they               would               be               willing               to               receive               on               this               listing               if               they               win.

They               also               select               the               collection               agency               that               will               pursue               the               borrower               if               s/he               does               not               meet               the               obligation.

When               a               lender               successfully               makes               a               bid               and               wins,               s/he               receives               payments,               with               interest,               on               a               monthly               basis.

The               life               of               the               loans               through               the               site               I               first               tried               this               through               is               three               years.

If               a               loan               is               100%               funded,               further               lenders               bidding               on               it,               will               drive               the               interest               rate               down,               something               that               benefits               the               borrower.
               When               a               lender               is               considering               which               loans               to               bid               on,               regardless               of               what               interest               rate               is               proposed,               it               is               important               to               only               bid               on               ones               that               you               feel               sure               would               repay               you,               and               who               give               adequate               information.

There               are               all               types               of               people               there,               and               people               there               who               could               not               manage               money               even               if               they               won               the               lottery,               as               well               those               who               make               a               lot               of               money,               spend               very               little,               and               loan               money               out.

While               it               will               ruin               a               person's               credit               report               if               they               don't               pay,               and               collections               will               pursue               them,               you               want               to               choose               people               who               care               about               their               credit               to               have               the               best               chance               of               success               as               a               lender.

This               should               be               self-evident.
               All               in               all,               it               offers               a               financial               option               of               possible               higher               interest               than               savings               accounts               and               bonds.

The               difference               between               investing               with               a               peer-to-peer               lending               site               and               just               having               a               savings               account               is               getting               your               principal               back               slowly.

However,               if               the               returns               are               acceptable,               lenders               will               be               patient               with               receiving               principal               with               interest               in               payments.
               Many               lenders               also               take               joy               in               the               human               aspect               of               this               type               of               lending,               because               people               are               cutting               banks               and               credit               cards               out               of               the               equation.

Borrowers,               when               they               are               paying               interest,               relish               the               chance               for               a               real               human               to               benefit.

Likewise,               lenders               take               chances               a               bank               would               not               take,               because               they               see               the               human               side.

Borrowers               benefit               with               better               interest               rates               from               lenders               competing.
               Credit               scores               are               not               necessarily               a               measure               of               a               person's               goodness               or               worth,               because               they               do               not               take               into               account               things               that               happen               outside               of               your               control,               that               even               the               best               of               us               could               not               anticipate.

If               you               are               the               type               of               person               that               is               a               winner               who               met               with               obstacles               but               is               determined               to               overcome               them,               this               offers               a               chance               to               turn               a               new               leaf.

Some               consolidate               high               rate               credit               cards               and               others               begin               businesses               or               seek               education.

Others               are               looking               to               pay               off               of               a               payday               loan               and               break               the               cycle               of               predatory               lending.

The               reasons               why               people               post               listings               are               as               individual               as               the               people               themselves.

For               those               who               are               responsible,               it               can               be               the               difference               they               are               looking               for.
               There               are               those               who               argue               that               the               human               side               of               credit               is               a               much               needed               value,               both               for               lenders,               who               can               receive               above               average               returns,               and               also,               for               borrowers,               who               at               times               need               that               step               back               up               and               would               like               to               pay               a               human               being               and               not               a               corporation.

Then               there               are               also               those               who               would               never               lend               money               to               a               stranger,               especially               one               on               the               Internet.

Peer-to-peer               lending               is               still               relatively               new.

If               you               are               interested               in               this               type               of               investing,               read               about               peer-to-peer               lending               from               a               variety               of               sources               on               the               Internet               and               find               out               what               others               have               to               say.

DISCLAIMER:               The               detail               about               how               the               process               works               is               based               on               my               experience               from               making               three               loans               at               Prosper.com.

I               do               not               know               if               the               other               two               sites               I               am               aware               of               do               things               in               the               same               way               because               I               have               not               yet               tried               them.
               MICROFINANCE/PEER-TO-PEER               LENDING               LINKS:
               Prosper:               http://www.prosper.com/               Description:               The               online               marketplace               for               people-to-people               lending.
               These               are               the               other               sites               I               am               aware               of               that               are               based               on               a               similar               concept.

As               in               anything,               you               should               do               your               own               research               before               making               up               your               mind,               be               skeptical,               and               never               invest               money               that               you               can't               afford               to               lose.
               Grameen               Foundation:               www.grameenfoundation.org.

Description:               Combining               the               power               of               microfinance,               technology               and               innovative               solutions               to               defeat               global               poverty.

Short               review:               http://www.squidoo.com/grameen
               Globefunder:               http://www.globefunder.com/               (International)               At               this               time               it               is               still               in               Beta               mode.

Description:               The               online               microfinance               lending               engine...to               match               lenders               and               borrowers.

Vision:               to               create               a               global               community               of               lenders.
               Zopa:               http://www.zopa.com/ZopaWeb/               (UK)
               Kiva:               http://www.kiva.org/               Kiva               Microlending               is               a               fast-growing               non-profit               that               provides               a               peer-to-peer               lending               infrastructure               for               third               world               entrepreneurs.

Kiva               lets               you               lend               to               a               specific               entrepreneur               in               the               developing               world               --               empowering               them               to               lift               themselves               out               of               poverty.
               Short               review               of               Kiva:               http://www.business-opportunities.biz/2006/07/28/a-little-money-goes-a-long-way/.


               A               review               of               Kiva:               http://randomspeak.blogspot.com/2007/02/microlending.html
               Further               research:               Good               search               terms               for               www.google.com               or               any               good               search               engine:               Kiva               microlending






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